DirecTV Group Inc., seizing on a court ruling against EchoStar Communications Inc., is offering some customers of the rival satellite television service $150 to switch providers.
Subscribers to EchoStar’s Dish Network who are losing broadcast network channels because of a federal appeals court ruling also are being offered free equipment and installation, El Segundo, California-based DirecTV said today in a statement.
The ruling creates an opportunity for News Corp.-controlled DirecTV, the largest U.S. satellite TV service, to poach some of the 900,000 EchoStar customers who are affected by the decision. EchoStar and DirecTV battle each other for customers and compete with cable and telephone companies.
“For DirecTV, this is like picking up loose change on the ground,” Craig Moffett, an analyst with Sanford C. Bernstein & Co., said in an e-mailed statement. He has an “underperform” rating on both companies’ shares. “The numbers won’t be big.
There just aren’t enough customers who are affected, but the opportunity is real and the customers are profitable.” Under the ruling, Englewood, Colorado-based EchoStar, the second-largest satellite TV service, faces a Dec. 1 deadline to turn off so-called distant market signals for all of the affected customers. Most of the subscribers affected by the ruling are in rural areas, a stronghold for satellite TV.
Shares of EchoStar fell 3 cents to $35.66 at 1:37 p.m. New York time in Nasdaq Stock Market composite trading. They had gained 31 percent this year before today. DirecTV rose 23 cents to $22.78 on the New York Stock Exchange and had advanced 60 percent this year.
