EchoStar Communications Corp. said Thursday that it added 335,000 net new
Dish Network subscribers in the first quarter of 2002, bringing its customer
base to 7.16 million at the end of March.
In an earnings call Thursday afternoon, CEO Charlie Ergen projected that the
company would reach 8 million direct-broadcast satellite customers by the end of
The company's guidance did not include any subscriber upside from a proposed
merger with DirecTV Inc. parent Hughes Electronics Corp., which could close late
this year if it wins government approval.
Ergen admitted that he was disappointed with some of the company's financial
metrics during the quarter, but he said they were a result of strategic
decisions EchoStar made to help its long-term economic models.
Promotions geared to putting multiple satellite receivers into the homes of
new subscribers led to higher costs, but they could help the company in the long
run with lower customer churn and higher revenue per subscriber, Ergen
Promotions offering free or discounted programming also cut into the
company's first-quarter revenues.
And Dish Network is seeing fewer pay-per-view buys per customer this year.
Ergen attributed this to a consumer trend toward renting and buying DVDs, as
well as a lack of big boxing events compared with a year ago.
The proposed merger continues as top management's primary focus, Ergen said.
That has given the more junior management team a chance to 'get off the bench
and get in the game,' he added.
Industrywide piracy problems probably played a role in cable's weakening
subscriber growth, Ergen said. If consumers can get satellite television
free-of-charge, he added, they're likely to churn from cable.