DISH to leverage rural satellite broadband to bundle with video

Michelle Clancy | 01-10-2012

DISH Network, the second-largest satellite TV operator in the U.S., is going to roll out satellite-based broadband service for the rural U.S. beginning in October, ahead of rival DIRECTV, which plans to tap that market next year. Both will strive to capture a sliver of the the estimated 14.5 million people in those regions without access to broadband.

The 10GB dishNET data plan will be bundled with TV, and offer a download/upload speed of 5/1 Mbps for $39.99 per month.The next tier is a 20GB data plan, which provides a download/upload speed of 10/1 Mbps and costs upto $49.99.

As the Englewood, Colorado-based company tries to capture 2 million new customers with these services, Zacks Equity Research says that the move could catapult DISH into a new realm, as a formidable multiservice operator to rival the telcos that serve these regions.

"We believe, with the launch of this service, DISH network will become a formidable challenger to large cable pay-TV and telecom service providers, which also offers triple-play video, voice and data services," Zacks analysts said in the company investment blog. "Furthermore, the launch of this service will allow it to diversify as the U.S. satellite market is already saturated."

Additionally, DISH Network is currently waiting for the FCC nod to launch a nationwide high-speed wireless broadband network to offer mobile Internet and phone services to its customers. That makes things yet more interesting. "If the company gets the green signal from FCC to use its airwaves then the company can offer a unique quad-play bundled service of satellite TV; satellite Internet, mobile Internet, and mobile phone services," Zacks said.

The current Zacks Consensus Estimate for Dish Network Corp. is pegged at 55 cents for the third quarter with a growth rate estimate of (22.63%). For 2012 and 2013, the Zacks Consensus Estimates stand at $2.43 and $2.50 with a growth rate of (16.08%) and 3.21%, respectively.