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Technology Stocks : Echostar Comm. -- Ignore unavailable to you. Want to Upgrade?

To: Stoctrash who wrote (1277)	5/16/2000 11:20:00 PM
From: Noel	Read Replies (1) \| Respond to of 1394

FredE: I think that the article is interesting because it talks about the idea of cutting acquisition costs per sub. The new promotion, Digital Dynamite, actually offers more FREE Equipment than ever. With the promo, the customer pays an activation fee, like a cell phone, and receives two boxes and the DISH 500. The requirement is a $49.99 per month payment. When you figure out that the AT150 (which comes bundled with the hardware rental) is $39.99 anyway - and the 2nd box security fee is $4.99 per month - the difference is that the customer pays $5.01 per month to rent two boxes. Best of all, they are covered with in-home service, so if the box goes bad, DISH provides a new one at no cost (and even covers the service call). As a result, DISH gets to compete against digital cable with a 150 channel package that is 100% digital, while offering customers an easy entry and a compelling service offer. And, unlike Primestar, they have the technology, the channel capacity and the installation capacity to make this go. The best part? DISH retains ownership of the boxes. After all, they were basically subsidizing the cost of the box anyway. But with prior offers, DISH couldn't show the boxes on their balance sheet as a depreciating asset - they had to expense them. With Digital Dynamite, DISH gets to book their subs but only book the portion of their box that depreciates in the current period. The resulting implication of this "paper shuffling" is that the customer gets a great offer and DISH gets to push expenses back to successive quarters. Of course, this is only my opinion, and I am not an accountant, but I believe this to be correct. Perhaps you know someone who could verify this?? Regards, Noel