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DirecTV To Raise Prices

1/24/2006 03:42:00 PM Eastern

El Segundo, Calif. – Satellite TV provider DirecTV said Tuesday that it will be applying a rate increase averaging 4 percent, effective, March 1.

The company blamed rising programming costs and increased spending on new services like HDTV in forcing the hikes.

Increases will vary according to programming tiers and subscriber status, with introductory rates for new subscribers rising higher than rates on packages for established customers.

Lower-priced tiers will see larger percentage increases of up to 8.7 percent than more expensive packages.

For new subscribers, the price for the introductory “Total Choice” package will rise $3 per month (7.1 percent), from $41.99 to $44.99.

The “Total Choice Plus” package will rise $4 (8.7 percent) from $45.99 to $49.99.

For existing DirecTV customers the prices will increase $3 across all packages, for an average of 4.5 percent.

The Total Choice Plus package, for example, will rise 6.5 percent from $45.99 to $48.99.

DirecTV’s rate hikes follow similar recent rate increase announcements from its satellite competitor EchoStar and from major cable companies.

Also in March, DirecTV will move to a leasing model for its receiver equipment.

Under the plan, dealers will make commissions on leasing equipment. The change was made to make it more attractive for customers to adopt new HDTV equipment and services.