Wall Street Analysts See Satellites Fending Off Cable Challenge

A group of Wall Street satellite analysts offered a spirited defense of the prospects for U.S. satellite TV operators to put forth a competitive bundle of video, broadband and voice services through partnerships to compete with their fierce cable television rivals.

“At the end of the day, you spend more on the cable bundle,” said Bob Peck, a satellite analyst with Bear Stearns. “A bundle of DSL and DBS is cheaper than going to your own cable guy.”

Tom Watts, a satellite and telecommunications analyst with SG Cowen, said satellite historically has been “cheaper” than cable, and the trend is continuing. It is a significant factor for people who are price-sensitive, he added.

However, DSL is an “inferior” service to cable, and it involves a trade-off for consumers who prefer the price and quality of satellite video but still want a bundled service, Watts said.

Patrick Fuhrmann, a satellite analyst with ABN AMRO, said satellite companies should focus on providing video and data packages to remain competitive. “Satellite TV video is superior, and it is adding value-added services,” he said.