Long-time rival DirecTV on Monday said it will pay $1 and assume $9.7 billion in EchoStar debt to acquire Dish Network and its Sling streaming service.
Faced with a choice between investing more in its new wireless business, which needs additional capital and time to catch on with consumers, or holding onto its legacy satellite and streaming television services, which generate cash but are shrinking, Englewood-based EchoStar Corp. has decided to go all in on wireless.
EchoStar has found a way to feed its wireless growth plans, where most of its assets — wireless spectrum — are concentrated and where it sees the most potential, while also providing the legacy satellite and streaming side of the business, which have seen steady losses in subscribers, a better chance to survive, he said.
EchoStar employs about 7,000 people in metro Denver, half of its overall workforce of around 14,000. Of that Denver-area total, 2,400 are dedicated to wireless services, which could see a higher headcount over time if marketing efforts prove successful.DirecTV buys Colorado-based Dish as satellite rivals hunker down against onslaught of streaming services
A combination should also eliminate costly churn, or consumers bouncing back and forth between Dish Network and DirectTV to win a better deal. That ran about 15% a year. On the downside, the boxes that each company uses to decode signals aren’t compatible with each other’s satellites. In the second quarter, DISH Network lost 104,000 paid subscribers. While that was an improvement from the 294,000 subscribers lost a year earlier in the second quarter, it contributed to a net loss for EchoStar.
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