Dish Network Corp. (DISH) waived its extra fees for high-definition programming, while DirecTV Group Inc. (DTV) plans to follow suit as both look to sweeten their offer and keep their products competitive with each other and the cable and telecommunications companies.

Dish, a satellite TV provider based in Englewood, Colo., began offering HD channels for free as part of its core service on Thursday, essentially a discount of $10 a month. DirecTV plans to cut its fees starting Saturday.

The moves are part of a broader effort by the satellite companies to defend their turf against the cable providers and telecommunications companies, which offer rival television services. DirecTV is also moving to keep pace with Dish. In the battle for customers, high-definition programming has been a major factor in deciding which service to use.

Dish has turned itself around through an improved high-definition lineup and more aggressive pricing, and added 237,000 subscribers in the first quarter. DirecTV, which has opted to sacrifice total growth for a focus on higher-value customers, added 100,000 in the same period.

Customers who sign up with Dish's least-expensive package--priced at $24.99 a month--will get "HD free for life." Current customers can pay a one-time $99 fee to take advantage of the HD channels, or sign a two-year contract and enroll in an auto-pay program.

DirecTV plans to offer new customers free high-definition channels as long as they maintain their accounts. The company had planned to unveil the promotion in January but decided to move it up, according to a spokesman.

While the move may draw in new customers, there are some risks, most immediately with higher subscriber acquisition costs and lower margins and earnings, said Collins Stewart analyst Thomas Eagan.

"(The Dish promotion) may reflect weaker-than-expected HD subscriber additions," he said.

Cable providers already offer high-definition programming automatically, but only if customers sign up for digital service, which is a level above the basic cable service many still have.

Dish shares fell 3.2% to $20.67, while DirecTV fell 3.7% to $38.23.

-By Roger Cheng, Dow Jones Newswires; 212-416-2153; roger.cheng@dowjones.com
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