Thomson and DIRECTV Sign Long-Term Supply and Development Agreement

Please reply by conversation.


Supporting Founder
Original poster
Supporting Founder
Sep 8, 2003
Las Vegas, Nevada
Thomson to Purchase Hughes Network Systems Set-Top Box Manufacturing Assets</SPAN>

EL SEGUNDO, Calif. & PARIS--(BUSINESS WIRE)--May 12, 2004--

Thomson (TMS)(TMM.PA)(Euronext Paris:18453)

The DIRECTV Group, Inc. (NYSE:DTV), the parent company of Hughes Network Systems, Inc. (HNS), and Thomson (NYSE:TMS; TMS Euronext Paris:18453), the world leader in integrated solutions (technologies, equipment and services) for the entertainment and media industries, today announced a definitive agreement for the long-term development and supply of digital satellite set-top boxes (STBs). As part of the transaction, Thomson will also acquire HNS' set-top box manufacturing assets.

The five-year supply agreement provides DIRECTV with an experienced partner for its forthcoming product and service development initiatives. Thomson will be involved in the technology development of new set-top box models during the contract period and will manufacture a full range of receivers including DIRECTV-brand high definition and digital video recorder (DVR) receivers, with an objective to deliver home receiving units that meet DIRECTV's pricing, quality and time-to-market objectives.

Based on the contract terms, Thomson expects to more than double its current annual revenues with DIRECTV. DIRECTV will receive from Thomson $250 million cash upon close of the sale of HNS' set-top box manufacturing assets. In addition, the agreement includes incentives to DIRECTV -- based on revenues and set-top box order volume to Thomson over the next five years -- that could increase the amount paid to as much as $400 million, including the up front amount. Thomson will be the lead supplier of DIRECTV System set-top receivers accounting for half of its needs.

The agreement is expected to close in the second quarter of 2004, pending customary regulatory reviews and approvals.

"This transaction reinforces our strategy to focus our business on DIRECTV and making DIRECTV the best television service available in the country," said Romulo Pontual, executive vice president and chief technology officer, The DIRECTV Group. "Thomson is the original manufacturer of DIRECTV receivers and over the years has been at the forefront of developing new set-top box features and technologies. We look forward to continuing our relationship with Thomson and working closely with them to bring innovative new products to DIRECTV customers that will enhance their viewing experience."

HNS has played a key role in the evolution of DIRECTV set-top box technology, and has continued to develop the products and the business to become a market leader with close to 16 million boxes shipped to date. With the sale of these assets, HNS' principal business will consist of DIRECWAY® broadband satellite networks and services for customers worldwide (HNS has over 70% market share in this VSAT industry); SPACEWAY(TM), the next-generation Ka-band satellite system, planned for commercial launch in 2005; and satellite-based communications systems, networks, and equipment.

"This agreement reinforces and further expands our long term technology and supply relationship with DIRECTV, and strengthens our strategic relationship with News Corp.," said Ghislain Lescuyer, senior executive vice president for Thomson. "We are pleased to become the market leader for DIRECTV and expect to provide to DIRECTV and its subscribers the same degree of innovation and excellence that has characterized our relationship over the last 10 years."

The agreement significantly reinforces Thomson's Video Networks Solutions Division, which provides digital equipment and services for broadcast television, cable and other network operators. Through this division, Thomson is one of the world's leading suppliers of digital cable and satellite set top boxes, DSL modems and IP Video set top boxes. As part of this agreement, Thomson will further expand its leadership position in providing advanced technology and solutions to integrated media companies around the world.

Certain statements in this press release, including any discussion of management expectations for future periods, constitute "forward-looking statements" within the meaning of the "safe harbour" of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management's current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements due to changes in global economic and business conditions, or regulatory factors. More detailed information on the potential factors that could affect the financial results of Thomson is contained in Thomson's filings with the U.S. Securities and Exchange Commission.

About The DIRECTV Group, Inc.

The DIRECTV Group, Inc. (NYSE: DTV) is a world-leading provider of digital multichannel television entertainment, broadband satellite networks and services, and global video and data broadcasting. The DIRECTV Group is 34 percent owned by Fox Entertainment Group, which is approximately 82 percent owned by News Corporation Ltd. Visit DIRECTV at

About Thomson

Thomson (Euronext Paris: 18453; NYSE: TMS) is the leading provider of technology and service solutions for integrated entertainment and media companies. By capitalizing on and expanding its leadership positions at the intersection of entertainment, media and technology, Thomson provides end-to-end solutions to content creators, video network operators and manufacturers and retailers through its Technicolor, Grass Valley, RCA and THOMSON brands. For more information:

Thomson's Broadband Access Products activity, part of Thomson's Video Network Solutions division, is a leading supplier of digital entertainment receivers to the world's major satellite, cable and terrestrial broadcasters. It is also one of the leading suppliers of high-speed modems, IP set-top boxes, and telephones to telephone companies around the globe. Products are marketed under several brands including RCA, Thomson, and SpeedTouch.

Contact: Thomson Press Relations: Tom Bracken (United States), +805-445-7293 Jean-Georges Micol (France), +33 1 41 86 50 03 Investor Relations: Pierre Villadary, +33 1 41 86 68 88 or Financial Dynamics Press Relations: Lorie Lichtlen, +33 1 47 03 68 10 or The DIRECTV Group, Inc. Press Relations: Bob Marsocci, +310-964-4656 ramarsocci@directv.comSource: Thomson
Please reply by conversation.

Users Who Are Viewing This Thread (Total: 0, Members: 0, Guests: 0)

Who Read This Thread (Total Members: 1)