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DirecTV Helps Hughes 4Q

Started by Gregg Lengling, Thursday Jan 16, 2003, 06:22:43 AM

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Gregg Lengling

The improving operating performance at DirecTV
U.S. helped Hughes Electronics in the fourth
quarter, but company officials said they
still need to deal with issues at other
units - including struggling DirecTV Latin
America.

During a conference call Wednesday, executives
hyped efforts taken at DirecTV during the
past 18 months to lower churn, reduce subscriber
acquisition costs and increase monthly revenue
per subscriber. They said that work helped
DirecTV fourth quarter revenues increase by
more than 19 percent to about $1.8 billion
and push up EBITDA to $191 million when
compared to the same period in 2001.

DirecTV ended 2002 with 11.18 million subscribers.
As for projections, DirecTV execs said
they expect the service to add between
750,000 and 800,000 net subscribers in 2003.
The company also plans a $2 rate increase
for certain packages.

Shaw said Hughes continues to shut down its
DirecTV DSL service and address issues
surrounding DirecTV Latin America. The CEO
said DirecTV Latin America's "condition is
unacceptable" and that a bankruptcy for the
unit may come at the end of the month.

Shaw said Hughes moved quickly to address
issues facing DirecTV Broadband and DirecTV
Latin America as soon as its proposed merger
with EchoStar was terminated. "As a result of
our recent announcements to shutdown DirecTV
Broadband and restructure DirecTV Latin America,
we expect to reduce our cash requirements by
several hundred million dollars over the
next few years," he said.

Spaceway, Hughes' next-generation satellite
platform, has met most of its cash requirements,
Shaw said. The platform needs $400 million -
mostly for the launch of satellites - to get
to the next step, he said. Shaw emphasized that
Spaceway will be marketed to enterprise
customers when it rolls out in 2004, and will
target residential users when that potential
"is proven."

Shaw wouldn't elaborate on any potential
acquisition of his company. It's expected that
News Corp. may bid for the Hughes and DirecTV
assets. Hughes abandoned its merger with
EchoStar in December due to government
antitrust concerns.

Hughes reported fourth quarter revenues
increased 8.3 percent to $2.471 billion,
compared with $2.281 billion in the
fourth quarter of 2001.
Gregg R. Lengling, W9DHI
Living the life with a 65" Aquos
glengling at milwaukeehdtv dot org  {fart}