Satellite

Dish Rates Going Up Feb. 1

1/05/2005 4:00 AM Eastern

EchoStar Communications Corp.’s Dish Network is raising the price of its programming packages by $2-$4 per month as of Feb. 1, citing rising programming costs and other expenses.

Customers will be notified in letters going out starting this week, company spokesman Steve Caulk said Tuesday. But customers checking their account information on the Dish Web site (www.dishnetwork.com) can apparently read about the increases now, along with a letter explaining the factors behind the rise.

EchoStar’s most-advertised entry price -- $29.99 per month for the “America’s Top 60” package plus local broadcast channels -- is rising to $31.99 Feb. 1, about a 6.7% increase.

“America’s Top 120” is rising $3, to $42.99 from $39.99, up 7.5%. “America’s Top 180” is going up $3, to $52.99 from $49.99, and “America’s Everything Pak” is rising $4, to $86.99 from $82.99, a 4.8% rise.

Basic prices for similar packages that don’t include local channels -- and, thus, start at about $5 per month less -- are also going up $2-$4 Feb. 1. For example, the America’s Top 60 basic package is rising to $26.99 from a currently advertised $24.99, an 8% increase.

In addition to rising costs for programming services, EchoStar faces an estimated $100 million expense to transition some customers receiving local channels on separate dishes over to a single dish that receives all local broadcasters Dish offers in a market, Caulk said.

“The good news is that we’re still the lowest-cost, all-digital provider in the pay TV industry,” he added.

Dish has been especially aggressive in attacking cable operators over annual rate increases. In November, Dish invited reporters to call when writing stories about cable-rate increases, promising to offer up local customers who’ve switched to Dish from cable.

EchoStar last raised the prices of Dish packages in February 2004.
DirecTV Inc. also raised rates last February and is expected to raise rates this year, as well.  Spokesman Robert Mercer said the largest direct-broadcast satellite provider would announce details of the price increase later in the quarter.

After MCN reported the EchoStar price increase, Sanford C. Bernstein & Co. analyst Craig Moffett said in a note: "This is good news for EchoStar [revenue per customer] and margins, and equally good news for cable operators and DirecTV. The increase is consistent with our view that 'competitive intensity' is perhaps not so 'intense' after all."
Moffett added that "the increases are significantly higher than the increases notched by Comcast and other cable operators for the coming year."

March