Charlie Ergen, the founder and chairman of DISH Network and EchoStar, said on a Q2 financial call with analysts Friday that a merger between the two direct-to-home (DTH) satellite services, DirecTV and DISH, is likely inevitable.
In light of AT&T’s difficulties maintaining DirecTV’s subscriber base since acquiring the business and DISH’s similarly declining subscriber totals amid the cord-cutting revolution, the speculation has surfaced that Ergen would once again make an attempt at combining the two satellite operations into one.
Ergen confirmed the speculation Friday, adding it isn’t a matter of if the merger will happen but when.
Ergen failed to get government approvals to acquire DirecTV’s satellite TV business almost 20 years ago, but it’s now widely believed that changing business conditions for the satellite TV industry, brought on by the wide availability of competition from broadband distributors and the fast growing nature of over-the-top (OTT) streaming services, likely leaves the Justice Department with little choice but to approve a deal today.
For its part, AT&T has said it is no longer planning to invest in new satellites for DirecTV and is actively trying to covert defectors among its satellite TV customers to its AT&T TV and AT&T TV Now live OTT streaming platforms.
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Ergen commented on the merger scenario as Dish reported its overall second quarter TV subscriber numbers showing a 6% decline to 11.27 million, some 9 million of which were DTH customers. DISH’s live OTT pay TV service, Sling TV, also showed a loss of another 56,000 customers in the period.
Comparatively, DirecTV had 15.1 million subscribers remaining before AT&T reported a loss of another 900,000 subscribers across all of its premium pay TV services in the second quarter.
Despite the subscriber losses for both companies, Ergen said the DTH business is still viable in the long term, with a core base of subscribers and businesses in rural America and elsewhere that have few other options.
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By Greg Tarr
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