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

To: John J. Thrall who wrote (610)	2/11/1998 10:38:00 PM
From: Noel	Read Replies (1) \| Respond to of 1394

I think that the continuing sale of boxes to Spain's Telefonica is an additional source of revenue. If you'll look back to last summer on this thread, I pointed out that the adoption of the Echostar digital receiver by Telefonica and Canada's Expressvu would be an undervalued asset to DISH. After all, once you standardize on a receiver, there's little chance to change vendors. The 100k new boxes DISH will sell not only generates some cash flow and revenue, but it allows them to reach economies of scale in their manufacturing operations that will bring their costs down further. And it is reasonable to expect that sales of this volume will continue for the forseeable future. Remember, ECHO was a C band manufacturer for years before they got into DBS. In fact, they made and sold more C band receivers than any other manufacturer. The knowledge they gained from that experience is directly reflected in the DISH box, which is far and away the best in the US DBS business. Finally, your estimate of time until profitability seems a bit distant. DISH has about 1.1m subs. As I remember, an announcement last fall by a brokerage firm initiating coverage (it slips my mind which one, maybe somebody on this thread will remember)issued a buy recommendation and said DISH would reach break-even at about 1.3m-1.4m subs (i have to admit, I would have figured it would be closer to 1.5m-2m). Even if the 1.3m number is optimistic, they could easily be at 1.75m subs by the end of 1998, and should be making money from that point on. Remember, DISH paid a lot less than anyone else to play in this game... Regards, NOEL