DBS Growth Slowing; Digital Cable Still Leads - Multichannel

DBS Growth Slowing; Digital Cable Still Leads

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DBS is still a great business, but it isn't as great these
days, according to a new forecast from the Yankee Group.

The Boston-based telecommunications analyst firm now predicts the number of
DBS households will rise from 20.6 million by the end of this year to 27.1
million by the end of 2007.

That is a 9 percent drop compared to the original estimate of 29.7 million.
Yankee cut back its estimate based on the lower net growth rate for satellite
services in 2002 and the impact of video on demand in driving rival digital
cable subscriptions.

Yankee also gives cable operators the digital TV edge overall, predicting the
number of digital cable households will rise to 22.6 million by year's end and
will reach 39 million by the end of 2007. Factors helping MSOs keep that lead
will be VOD and high-definition TV services, according to Yankee.

But DBS will continue to grow, in particular drawing away basic subscribers
at a rate of less than 1 percent yearly.

Going forward, the Yankee analysts predict News Corp. will buy out Hughes
Network Service's DirecTV Inc., but it will take as much as a year to get the
regulatory approval and another six to 10 months to reform the DirecTV
business.

After that, it will start to gain subscribers at a faster rate than rival DBS
provider and one-time merger suitor EchoStar Communications
Corp.

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