MURDOCH TRYING AGAIN OVER DIRECTV

Rupert Murdoch was scheduled to again meet the directors of Hughes Electronics on Monday April 23 to press his suit for DirecTV.

Murdoch’s plan is to slot DirecTV into his planned Sky Global Networks planned operation. However, it is not expected that Hughes will make any firm response unti May.

Meanwhile, Hughes reported better than expected first quarter 2001 results with total revenue of $1.89 billion (E2.1bn), 11 per cent growth from the $1.70bn in 1Q 2000. EBITDA was $113 million, ahead of analyst’ estimates of $78 million.

DirecTV reported 340,000 net new subscribers, also better than expected. Management stated that it is adopting a cautious approach to subscriber growth at DirecTV, focusing on maximising EBITDA.

Marc Nabi, senior analyst at Merrill Lynch, New York, says they view this decision as “extremely positive,” adding, “We have lowered our 2001 sub addition forecast to 1.45mm from 1.65mm, below management’s expectations of 1.5-1.7mm. Likewise, we raised our 2001 EBITDA forecast to $487 million from $407 million to reflect lower absolute marketing costs.”

Hughes says that DirecTV’s average monthly revenue per customer rose to approximately $55 per month, up from $51.49 in 1Q 2001. The increased ARPU resulted from price increases as well as local network channel offerings. ARPU should continue to receive a boost from rate increases as well as installing second set-top boxes. DirecTV’s 1Q/2001 churn was 1.7 per cent per month, up from 1.5 per cent in 4Q 2000. However, it is important to note that churn typically spikes in the first quarter of each year.

Nabi is forecasting an end-of-2001 subscriber position as 10.95 million for DirecTV in the US and another 1.8 million for its DirecTV Latin America subsidiary.