AT&T Drops DISH Network
Posted on July 2, 2008
Filed Under DIRECTV |
AT&T dealt a blow today to satellite TV provider DISH Network, announcing it would terminate its resale contract at the end of its current term. The contract, which runs until the end of 2008, allows AT&T to sell DISH Network television service across the AT&T service footprint.
AT&T has resold DISH Network service for 5 years now, starting in 2003. The news sent DISH Network stock down 4% on the day. While the news certainly can’t be considered good from DISH Network’s perspective, it may not mean anything in the long run.
The company has accelerated the deployment of their own pay television service U-verse, but building the service from scratch will take years. AT&T just started selling DISH Network service in the former Bell South territory that was recently merged into AT&T. Bell South formerly had a resale agreement with DirecTV, as do Verizon and Qwest.
AT&T is publicly saying that they are not sure if they will sell satellite TV service at all in 2009. Right. AT&T will certainly continue a partnership with one of the big satellite providers, either Direct TV or DISH Network when 2009 rolls around. There is simply too much easy money on the table in that game, as all AT&T has to do is promote and sell the service, no maintenance or troubleshooting of problems required. Without a satellite agreement with either Direct TV or DISH Network, AT&T would also be restricted in selling so called “triple play” bundles, combinations of voice, video, and high speed internet services.
Obviously, AT&T is using the end of the contract to bargain hard for a sweet agreement with one of the satellite providers. If DirecTV wins an agreement, they will further extend their lead in the satellite television battle. DISH Network needs AT&T more than DirecTV does, and may have to give away the farm in order to forge a new contract.
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Great move by AT&T. They will probably get a much better deal by seemingly being uninterested in getting a contract with one of the satellite companies. I just hope it translates to lower prices for the consumers.
[...] AT&T Drops DISH NetworkAT&T dealt a blow today to satellite TV provider DISH Network, announcing it would terminate its resale contract at the end of its current term. The contract, which runs until the end of 2008, allows AT&T to sell DISH Network television … - [...]