EchoStar Gains Foothold at Unitymedia

EchoStar Corp. LLC (Nasdaq: SATS) has broken the cable set-top seal after notching a deal with Unitymedia GmbH , Germany's second-largest cable operator, Light Reading Cable has learned.

EchoStar, Charlie Ergen's set-top and technology spinoff, signaled its intention to enter the European cable market in 2009, touting a new line of boxes that support a variety of conditional access systems as well as the video "placeshifting" technology it acquired from Sling Media Inc. (See EchoStar Jumps the Pond and EchoStar to Buy Sling Media.)

EchoStar is pitching a line of broadband-connected, "SlingLoaded" set-tops to cable operators and telcos. EchoStar corporate cousin Dish Network LLC (Nasdaq: DISH) was the first to launch a SlingLoaded box, the ViP922, last month. But sources say Unitymedia is starting off with an EchoStar-made HD-DVR that doesn't feature Sling technology. (See Dish Starts Selling 'Sling-Loaded' HD-DVR and EchoStar: We're Cable's Answer .)

The size of Unitymedia's EchoStar box order isn't clear, nor is the expected timing of its deployment in Germany. There are also questions around how EchoStar's boxes will factor into the long-term strategy at Unitymedia, which has 4.55 million subscribers, and which was recently acquired by John Malone's Liberty Media Corp. (NYSE: LMC). (See Liberty Splashes $5.2B on German Operator and Liberty Global Completes Unitymedia Buy.)

Regardless, a deal with Unitymedia would mark the first cable deal for EchoStar, which is exhibiting its wares this week at The Cable Show in Los Angeles.

EchoStar declined to comment. Unitymedia was not available for comment as of Monday evening.

However, EchoStar execs confirmed on its first-quarter earnings call on Monday that the company had scored a box order from an unidentified European cable operator.

"We have orders from a European cable company, which, at this time, we're not allowed to disclose," EchoStar president Mark Jackson said, in response to an analyst's question about the company's cable market strategy. He noted that the European MSO in question was also "looking at our Sling product."

"We continue to work with other guys throughout Europe and Latin America pretty heavily today," Jackson added, noting that EchoStar had recently "reengaged" with an cable operator in South America that had also placed a box order.

That EchoStar's initial cable box traction is coming from outside the US isn't a huge surprise. Some US cable operators have been reluctant to jump into bed with EchoStar due to its corporate ties to Dish, one of the cable sector's fiercest competitors.

Although getting a deal with a major US MSO would be a huge coup, EchoStar, which was spun off from Dish in January 2008, is considered more likely to make a dent domestically with smaller, Tier 2 MSOs and independent operators.

And it appears that EchoStar is making some headway there, as well. "We certainly have a number of products out under evaluation in the US markets, as well as internationally… and some of that relates to Sling," said EchoStar CEO Mike Dugan. "Some of that relates to possible replacement cable set-top boxes." He added that US cable activity has been picking up since the company's last earnings call.

Dugan didn't dwell on that point, but it's become quite clear that smaller MSOs are hesitant at this point to invest in and deploy tru2way, a common headend and middleware platform. (See Another Operator Shuns Tru2way .)

EchoStar has developed a tru2way-based box, but there's no reason why an MSO couldn't pair a non-tru2way HD-DVR (from EchoStar or from another provider) with one of EchoStar's standalone Slingbox models, including a sleeker, adapter-like version it unveiled at the 2010 Consumer Electronics Show. (See EchoStar Slings Its First Tru2way Set-Top and Dish Slings Its 'TV Everywhere' Strategy.)

On Monday, EchoStar posted first-quarter revenues of $627 million, up 31 percent year-over-year, with net income of $72 million (85 cents per share), up from a net loss of $1 million (1 cent per share). (See EchoStar Reports Q1.)

— Jeff Baumgartner, Site Editor, Light Reading Cable

Jeff Baumgartner 12/5/2012 | 4:36:38 PM
re: EchoStar Gains Foothold at Unitymedia

We're still trying to track down the size of EchoStar's first cable box deal (well one of at least two -- it claims to have a deal with an MSO in Latin America still unnamed), but interesting that  we're hearing Unitymedia didn't go with a Slingloaded option out of the blocks... not sure if there are any special legal questions that come up with the Sling concept in Germany. 

But the MSO can add that component on later since it looks like EchoStar is coupling its Slingloaded box strategy with stand-alone slingboxes that are getting smaller and smaller.... maybe a USB Slingdongle is on the horizon?


Brandon C 12/5/2012 | 4:36:27 PM
re: EchoStar Gains Foothold at Unitymedia

They sell the Stand Alone Slingplayer in Germany so don't know why they can't use a Sling Loaded device.

I guess they could always add the Slingbox® 700U later.  At only 200 mm x 100 mm x 10 mm


Brandon C


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