EchoStar Pursues a Strategy Shift

ECHOSTAR PURSUES A STRATEGY SHIFT
[SOURCE: Wall Street Journal, AUTHOR: Andy Pasztor andy.pasztor@wsj.com]
EchoStar has decided to ratchet up spending in the face of mounting competition. Rival cable and satellite-television services, for example, are investing in facilities to provide high-definition video programming. The company will invest more than $1.6 billion to dramatically increase its satellite fleet over the next few years, with plans to potentially lease some of the extra capacity to other companies. So far, EchoStar has primarily built satellites to serve its more than 12 million subscribers, and it previously signed up to use additional capacity on other satellites operated by SES Global's U.S. unit. But with its new strategy calling for a total of at least another nine wholly owned or leased satellites supporting its expansion program into the next decade, EchoStar would have greater flexibility to move outside the company's core satellite-to-home broadcast niche. Some of the new satellites are intended as replacement and supplemental capacity "to allow EchoStar to leapfrog cable-television providers" in beaming down high-definition programs to households, according to Vijay Jayant, an analyst with Lehman Brothers. But if the appetite for such content fails to take off, Mr. Jayant said, EchoStar "has looked at the cost-benefit analysis" and decided "it also can become a satellite player" in the wholesale arena.
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