EchoStar in talks with Telefonica, Oi for Brazil satellite TV JV
Gabriel Miramar-Garcia | 08-10-2012
EchoStar Corp. is in talks with Brazil's Telefonica Brasil and Oi to form a joint-venture satellite-TV service, possibly under the DISH name, according to reports.
The satellite capacity and set-top box (STB) manufacturer (and owner of DISH Network) will offer the mostly fixed-line operators Telefonica and Oi a way to tap satellite to expand their geographic presence, sources told the Wall Street Journal.
"We have the best spectrum in Brazil," Charlie Ergen, CEO of EchoStar, told the WSJ in June. "EchoStar would like to grow their business internationally, but they don't want to do that alone. That's something that we would do with partners."
DISH could use a bit of traction in Latin America, which is a fast-growing emerging market and offers greenfield opportunities to add market share, unlike the United States, which has reached saturation level.
Brazil had 15.1 million pay-TV homes at the end of August, according to Anatel, out of 67 million households. The market grew by 30% this year alone. Brazil is making a big push to expand pay-TV coverage ahead of the 2014 FIFA World Cup that it is hosting, and Anatel said the country would end the year with 17 million homes taking pay-TV subscriptions.
In fact, DISH's arch-rival, DirecTV, earlier his year announced that it would look to double its business in Latin America, considering it the main growth opportunity for the company going forward. Last quarter, DirecTV added its largest quarterly gain in Latin America, with 645,000 new net subscribers. In the U.S. it lost subscribers for the first time in its history.
However, it could be that EchoStar will simply run a wholesale deal that has nothing to do with DISH, in which the local players will market service and handle the customer acquisition. But EchoStar does have a model for a DISH-related partnership under its belt: in Mexico it has a JV with local operator MVS Comunicaciones to operate DISH Mexico.
In any event, EchoStar completed a purchase of pay-TV satellite spectrum from Brazilian regulator Anatel for $140 million in August. At the time, EchoStar CEO Mike Dugan said that the company was deep into negotiations already with potential pay-TV partners in order to take advantage of it—apparently those partners include Telefonica and Oi.