Mergerless EchoStar means rate increase

With Echostar and DirecTV's proposed merger in bureaucratic shambles, Charlie Ergen is now threatening to raise satellite TV rates and cut service promotions if he doesn’t get his way.
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Charlie Ergen is not in a good mood these days. With Echostar and DirecTV's proposed merger in bureaucratic shambles, Charlie Ergen is now threatening to raise satellite TV rates and cut service promotions if he doesn’t get his way.

EchoStar’s chairman claims his direct-to-home satellite service is underpriced and he’ll be forced to raise subscriber rates if the federal government ultimately blocks the proposed merger.

Speaking with analysts via a conference call, Ergen noted that cable prices will rise under a combined Comcast AT&T (See Beyond The Headlines: Comcast and AT&T Broadband deal gets FCC's Blessing) Therefore, a lone EchoStar, he said, would have to follow suit. “It won't be bad for us,” Ergen said, “just for consumers.”

Calling his company’s third quarter results “mixed,” Ergen said EchoStar had experienced considerable churn of customers, blaming it on a “three months free” promotion and program piracy. Total revenue for the quarter was up 19.6 percent to $1.2 billion.

Ergen said his attempts to merge with DirecTV would continue, although he conceded that at this point it’s an “uphill fight.”

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