The start of EchoStar’s planned transition from MPEG-2 to the more efficient MPEG-4 digital compression standard for its DISH Network direct broadcast satellite television service is “about a year away,” the company’s CEO Charles Ergen told analysts on conference call.
Ergen said his company had planned to begin transitioning customers to MPEG-4 in 2004, in order to carry more channels on the satellite TV service. In particular, EchoStar is looking to add additional HDTV channels, which require significantly greater bandwidth than standard-definition channels.
He added the start date was pushed back, in order to handle the massive upgrading effort. The company has had difficulty obtaining chipsets and getting standards done, Ergen said.
The CEO said EchoStar has not added new channels to its HDTV programming lineup in recent months because it has not had the bandwidth capacity aboard its satellite fleet. It also has not been more aggressive about promoting its HDTV services lately because plans for the MPEG-4 transition were in the works, Ergen said.
The transition to MPEG-4 will require replacement of existing set-top boxes in subscribers’ homes. The change-out is expected to take four years to complete.
Ergen said the process will be handled in phases, with DISH Network HDTV customers expected to be in the first wave of equipment upgrades. During the transition period, DISH Network programming will be transmitted in both MPEG-2 and MPEG-4 formats.
New MPEG-4 decoder boxes will be backward-compatible with MPEG-2 transmissions, but legacy MPEG-2 boxes will not be able to receive the new MPEG-4 signals, Ergen said.
Rival DirecTV is also expected to move to the MPEG-4 compression standard in the future, as it looks to offer HDTV channels in its local-TV station packages. Voom is also planning a transition to the MPEG-4 system in 2005.
