Following a bumper year for US satellite TV subscriptions in 2004, this year is set to be tougher.

Latest forecasts from Toronto-headquartered strategy advisors Convergence Consulting Group show satellite operators facing stiffer competition from cable firms, the fallout from price increases and a focus on churn.

Satellite TV is forecast to add 2.55m subscribers, bringing the total to 27.4m for 2005. The gain is less than the 3.2m customers recruited last year.

Cable firms are expected to lose fewer basic customers this year closing 2005 with 68 million, while digital cable customers are expected to top 29.3m.

The battle, according to Convergence, is expected to focus on the bundling of services. More cable operators are forecast to offer internet and telephone options together with TV.

Telephone companies are expected to hit back at satellite and cable operators as they roll out their own bundles throughout the year.

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