Gregg Lengling
07-22-2003, 08:09 AM
SBC Communications and EchoStar created a strategic partnership that will give SBC companies the ability to aggressively market co-branded "SBC DISH Network" TV services as a fully integrated part of their bundled offerings. And, with the new partnership in place, EchoStar issued and sold a $500 million, 3 percent convertible subordinated note due 2010 to SBC in a privately negotiated transaction.
The two companies will begin work immediately on integrating operations, including order entry, customer service and billing, so they can begin offering the co-branded product in early 2004.
The "SBC DISH Network" DBS service will offer SBC customers access to satellite TV, and SBC companies will market the TV service in bundles that may include local telephony, long distance (where available), wireless and DSL Internet service.
"This deal solves a lot of problems, though judging the fruit from this arrangement will be 12-18 months away," said Marc Nabi, managing director with Merrill Lynch. "Although we are not thrilled by a third party handling DISH Network video customers, we are confident that EchoStar will be very careful to ensure high-quality support."
The $500 million note is an unsecured obligation of EchoStar convertible into approximately 6.87 million shares of EchoStar's class "A" common stock at the option of SBC ($72.82 per share). As part of the multi-year agreement, SBC will help fund the development of the co-branded bundled video services.
The two companies will begin work immediately on integrating operations, including order entry, customer service and billing, so they can begin offering the co-branded product in early 2004.
The "SBC DISH Network" DBS service will offer SBC customers access to satellite TV, and SBC companies will market the TV service in bundles that may include local telephony, long distance (where available), wireless and DSL Internet service.
"This deal solves a lot of problems, though judging the fruit from this arrangement will be 12-18 months away," said Marc Nabi, managing director with Merrill Lynch. "Although we are not thrilled by a third party handling DISH Network video customers, we are confident that EchoStar will be very careful to ensure high-quality support."
The $500 million note is an unsecured obligation of EchoStar convertible into approximately 6.87 million shares of EchoStar's class "A" common stock at the option of SBC ($72.82 per share). As part of the multi-year agreement, SBC will help fund the development of the co-branded bundled video services.