DirecTV Sees More Than 30 Million Subscribers By 2013
December 02 2010 - 9:51AM
Dow Jones News
DirecTV Group Inc. (DTV) expects to generate more than $30
billion in annual sales and serve more than 30 million customers by
2013.
"We're continuing to see momentum," Chief Executive Michael
White said during the company's investor day event on Thursday. He
added the company is on track for the best quarter of the year in
terms of revenue and subscriber growth.
The company is expected to generate roughly $24 billion in
revenue this year, and it ended the third quarter with nearly 19
million subscribers.
DirecTV represents a rare case of a consumer-centric company
that continued to spend even as people trimmed their budgets. The
company's decision to focus on more upscale consumers kept it
relatively insulated from the downturn in consumer spending. As a
result, its subscribers were more willing to pay for premium
services such as digital video recorders, extra pay channels and
pay-per-view events, resulting on improved profitability and growth
even as its cable competitors lost video subscribers.
White said the company will also deliver $5 a share in free cash
flow and earnings. He also expects the company to buy back a third
of its stock by 2013.
Unlike the regionally based cable providers, DirecTV benefited
from higher activity in its Latin America business, which was
helped in the summer by rabid interest in the World Cup, but
continued through the third quarter.
In total, the company added 140,000 net new customers in the
third quarter, with most of the growth coming from Latin
America.
"We have demonstrated success and proven ourselves a leader,"
said Bruce Churchill, president of the company's Latin American
arm. He added the company has a number of competitive advantages
that will help it maintain its lead in the region.
The middle class in several of its regions, including Brazil, is
growing, he said, adding that he expects Brazil's market is
expected to double.
DirecTV will soon have more competition in the area. Brazilian
regulators recently removed barriers to enter the pay-TV business,
and the country's largest landline phone company, Tele Norte Leste
Participacoes S/A (TNLP4.BR, TNE), also known as Oi, said recently
it expects to launch an Internet-based TV service in the next six
months.
Churchill said that the low-cost nature of the business gives
satellite TV an advantage over fixed-line companies because of the
cost required to build out the infrastructure. DirecTV, meanwhile,
is able to take advantage of the advanced services it delivers in
the U.S. and eventually move those features into Latin America.
-By Roger Cheng, Dow Jones Newswires; 212-416-2153;
roger.cheng@dowjones.com
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