US Cable Firms Look to Satellite-TV

23 July 2003

US telephone operators SBC Communications and Qwest Communications are joining forces with satellite-TV providers to expand their product offerings.

In the more extensive of the two tie-ups, SBC has unveiled a major agreement with EchoStar, America’s second largest satellite group. Under the deal, the phone firm will buy $500 million (€440m; £312m) of its new partner’s convertible debt.

From early 2004, SBC will offer subscribers EchoStar’s TV platform in a scheme branded SBC DISH Network. The agreement matches the phone company’s tie-up with Yahoo!, meaning that its customers can now gain up to five services – local and long-distance phone, cellphone, satellite-TV and broadband internet – straight from SBC sales representatives and receive a consolidated bill.

Denver-based Qwest, meanwhile, has deals with both EchoStar and satellite market leader Hughes Electronics. Starting later this year, it will offer EchoStar services to subscribers in Nebraska and Colorado, and Hughes’ platform DirecTV to those in Phoenix, Tucson (Arizona) and Seattle.

The agreements come as telephone companies seek to stave off the threat from cable firms offering bundled telecoms and entertainment packages.

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