Douglas County-based EchoStar Communications said today that it is considering breaking into two separate companies – a consumer satellite-TV operator and a wholesale technology and infrastructure assets firm.
“We believe separation of our consumer-based and wholesale businesses could unlock additional value,” EchoStar chairman Charlie Ergen said in a statement. “Each company would be able to separately pursue the strategies that best suit its respective long-term interests. The spin-off transaction would also allow employee incentives to be tied to their respective company’s performance, and improve opportunities to effectively develop and finance expansion plans.”
The pay-TV business would have roughly 13.6 million Dish Network subscribers, and would also include installation, customer service, billing and other consumer services. Ergen would continue to serve as chairman and CEO of DISH Network, and would fill the same roles with the spun-off company.
The assets company would feature EchoStar’s set top box design and manufacturing business, its international operations, and assets used to provide fixed satellite services to third parties, which includes satellites, uplink centers and spectrum licenses not considered core to Dish. EchoStar shipped the set-top more than nine million units set-top boxes in 2006 to Dish and international customers. Sling Media, which the company recently announced it would acquire for $380 million, would also fall under this assets business.
