EchoStar Reports Q3 Loss, Plans for Merger Collapse

18 November 2002

US satellite operator EchoStar Communications is preparing a contingency plan for life without larger rival Hughes Electronics/DirecTV after the merger between the two was blocked by antitrust regulators.

Reporting a Q3 loss, EchoStar chairman Charlie Ergen vowed to fight regulators’ opposition to the deal, but admitted “realistically, it's an uphill fight.”

In the likely event that the merger fails, EchoStar is planning price increases, targeted marketing and a scaling back of its internet ambitions. Ergen is also hoping for “some kind of negotiated settlement” over the $600 million (€595m; £380m) break-up fee owed to Hughes.

For the third quarter, EchoStar posted a $168m loss, falling from a $3.1m profit in the same quarter last year. Despite a 20% surge in revenues to $1.22 billion and strong subscriber growth, it was dragged down by raised customer-acquisition costs and a $134m charge on the stake in the firm held by Vivendi Universal.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff