EL SEGUNDO, CALIF. -Hughes Electronics Corp., which provides digital multichannel TV entertainment through its existing DirecTV base of more than 9 million customers, said it will acquire Cupertino, Calif.-based Telocity, a provider of broadband services via digital subscriber lines (DSL). The purchase price is $179 million in cash.
With the addition of Telocity's existing DSL-based network, Hughes will be able to significantly expand its ability to offer Internet and broadband services to consumers throughout the United States.
"This acquisition is strategically important for Hughes and DirecTV," said Michael T. Smith, Hughes chairman/CEO. "We currently provide DirecPC as our primary nationwide Internet and broadband offering, but the projected demand for broadband exceeds our existing capacity to deliver it by satellite.
"With the addition of Telocity, we achieve nearly unlimited capacity and can offer our customers a choice of DSL, where it is available, and two-way satellite broadband in circumstances were customers prefer satellite delivery or where DSL is not and will not be available."
Telocity currently has an expandable service network that extends across 140 U.S. metropolitan areas-40 percent of the country's population, said Hughes.
With the acquisition of Telocity, Hughes, a unit of General Motors, would become the first provider to offer on a national basis a portfolio of consumer entertainment and information services that includes digital multichannel television, and wired and satellite broadband Internet access, Hughes said.