- Sep 8, 2003
Buyout of DirecTV puts pressure on EchoStar
By Chris Walsh, Rocky Mountain News
January 5, 2004
For Littleton-based EchoStar Communications Corp., the competition just got tougher.
News Corp.'s takeover last month of DirecTV - the world's largest satellite-television company - isn't exactly good news for EchoStar and its top executive, Charlie Ergen.
EchoStar now competes against a company that has the financial backing, commitment and resources of billionaire media mogul Rupert Murdoch.
But EchoStar, the world's No. 2 provider of satellite TV, also may benefit from the deal.
Analysts say the real battle for subscribers is not between EchoStar and DirecTV. Rather, the war is being waged by the two satellite providers against cable operators, who in recent years aggressively upgraded systems and unleashed new products.
If DirecTV is able to leverage its resources to convince more consumers to switch to satellite, that will only help EchoStar.
"There's no question (the acquisition) does hurt EchoStar; it only puts more pressure on them competitively," said Sean Badding, an analyst with the California-based research firm Carmel Group.
"But there's also no question that now with a bigger player in satellite, DirecTV can use that weight to capture more from the cable industry, and that could help EchoStar in the sense of it being part of the satellite industry."
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