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EchoStar Gains 350K Net Q4 Subs

3/01/2007 01:34:00 PM Eastern

Englewood, Colo. — EchoStar has added about 350,000 net new subscribers during the fourth quarter ended Dec. 31, to give the company 13.1 million total subscribers.

Over the year, EchoStar’s Dish Network added 1.1 million subscribers.

At the same time, EchoStar said total revenue during the quarter reached $2.58 billion, up 17 percent from $2.20 billion from the same period in 2005. Total revenue for the year reached $9.82 billion, up 16.2 percent from the $8.45 billion recorded in 2005.

Net income totaled $153 million for the quarter, up from $133 million a year ago. For the year, net income totaled $608 million, compared with $1.51 billion in 2005. EchoStar pointed out that the 2005 number included a non-recurring, non-cash benefit of approximately $593 million to recognize the tax benefits of previously reported tax losses and a $134 million gain related to the settlement of an EchoStar IV satellite insurance claim.

In an earnings conference call, EchoStar chairman Charlie Ergen said his company saw little impact from court judgment that required shutting off distant network TV service to approximately 900,000 subscribers. Ergen said the “vast majority of the 900,000 distant network subscribers were able to get local services from us.”

He said about 100,000 subscribers were able to continue getting distant network services from a third party satellite provider and a smaller number of subscribers left to get service from cable, satellite or telco TV competitors.

EchoStar executives did not break out HDTV subscribers but said they were “pleased with where they are in high definition.” Ergen pointed out that some of the high subscriber additions in the quarter were attracted to Dish Network’s high-definition packages, which continue to offer about 30 national HD channels and a growing number markets getting local HD service. About 50 markets are expected to receive local HD service through Dish by the end of the year.

Company president Carl Vogel said that EchoStar has maintained an advantage in HD programming by offer value pricing and a compelling HD PVR.

On the downside, Ergen said he was not happy with fourth quarter expenses, adding “we have to do a better job having teams work together to minimize calls and costs associated with them.”

Commenting on DirecTV’s reported bid to get exclusive rights to Major League Baseball’s out-of-market games package, Vogel said “if a customer on any platform has enjoyed that product, it shouldn’t be taken away from them. We like a world where content is available to as many sources as possible.”

He added that DirecTV’s exclusive rights to carry the NFL’s similar Sunday Ticket package “is a little different discussion” because DirecTV developed it and the package never existed anywhere else before DirecTV began offering it.

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