Hot June Nudges DBS Above 10M


Direct-broadcast satellite executives heading to Las Vegas
for the Satellite Broadcasting & Communications Association show this week have
something to celebrate.

The industry officially reached the 10 million-subscriber
mark with the June acquisition counts released last week by DirecTV Inc. and EchoStar
Communications Corp.

The 10 million tally includes 5.3 million high-power
DirecTV customers, 2.1 million PrimeStar by DirecTV medium-power customers and
EchoStar's 2.6 million Dish Network subscribers.

The count excludes the roughly 1.8 million big-dish C-band
customers. C-band's customer base has declined steadily over the past year.

DirecTV added 117,000 net new customers last month, 46
percent more than in June 1998. At 673,000, DirecTV's first-half-1999 subscriber
acquisitions rose 48 percent.

EchoStar, too, saw strong subscriber growth. Dish added
105,000 new customers, up 50 percent over June 1998. Running nearly neck-and-neck with
DirecTV, Dish acquired 657,000 net subscribers in the first half of this year -- 92
percent more than in the first half of 1998.

Because DBS sales are so seasonal, The Carmel Group analyst
Sean Badding said, "When you get this much growth in what's traditionally seen
as off-season, that's a good sign for DBS."

Because DBS is so dependent on retail distribution, the
category has historically seen the largest subscriber gains in fourth-quarter months,
particularly December.

"Cable is taking the DBS industry a little more
seriously," noted Evie Haskell, managing director of SkyTRENDS, which tracks
DBS-subscriber numbers.

Haskell hosted a panel on competition last month at the
National Show in Chicago. "I was surprised at how much many of them knew they'd
have to compete with DBS," she said.

"Even a year ago, some of these guys were saying that
DBS was just going to blow away," she added. "Now they're talking about how
they have to upgrade to 750 megahertz in order to compete."

June marked the first full month during which DirecTV transitioned customers from its
medium-power PrimeStar service to its core high-power product. This entails switching out
equipment and signing customers to new programming packages.

DirecTV migrated 20,000 customers last month, and it said
it has scheduled an additional 200,000 PrimeStar by DirecTV customers for the transition
to high-power.

For the past several months, EchoStar has aggressively
pursued former PrimeStar Inc. customers, offering to switch out equipment free-of-charge
if they sign up for Dish service.

DirecTV's two top rural resellers -- Pegasus
Communications Corp. and Golden Sky Systems Inc. -- also reported June subscriber numbers
earlier this month.

Pegasus added a net 12,600 customers, bringing its total to
515,388, not counting pending acquisitions. Golden Sky reported net subscriber growth of
12,400 in June, bringing its total to 297,000.