Dish Chairman:Hates Discounting, Sees Room For Price Increases

Charles Ergen, chairman and founder of Dish Network Corp. (DISH), said Monday the satellite television provider's average revenue per unit metric could show improvement in the current quarter as a major promotional offer it launched last year ends.

"I hate discounting," said Ergen during a conference call with analysts following Dish Network's fourth-quarter earnings release. "I hate devaluing what we sell. I don't mind giving away hardware, but I hate discounting the programming that we sell."

The company showed a sharp improvement in subscriber growth and its customer churn rate in the fourth quarter, but the improvement was the result of aggressive discounting as the company's average revenue per unit remained stagnant.

Ergen said that excluding its recent offer to require customers to commit to Dish Network's service for 18 months instead of 24 months, the company's churn rate would have been more in line with its rival, DirecTV Group Inc. (DTV).

Ergen said DirecTV transformed the satellite TV business into a commodity business a few years ago when it chose to offer steep discounts, and he said Dish Network has good prospects as a result, since its brand lags DirecTV.

"We have some room for price increases that won't materially hurt our business going forward," said Ergen.

Dish shares recently rose 5.5% to $21.06.

-By Nat Worden, Dow Jones Newswires; 212-416-2472; nat.worden@dowjones.com

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