BellSouth and DIRECTV entered into a strategic marketing alliance under which DIRECTV digital satellite television service will be sold to BellSouth customers beginning in early 2004. BellSouth residential customers will be able to bundle DIRECTV with their other voice, DSL and wireless communications services at packaged, discounted savings. The companies also agreed to explore ways of integrating digital satellite and terrestrial broadband services. DIRECTV ordering software will be integrated into all BellSouth call centers. The companies said they are focused on offering a complete "cable TV replacement service at an attractive price."
Bill Smith, BellSouth's chief product and technology officer described the partnership is "a long-term solution" for expanding its service bundle. In addition to short-term capabitlities in video services, Bill Smith said the DIRECTV partnership provides a "clear roadmap for evolving the BellSouth network. "Specifically, BellSouth is working to expand the partnership to include a distribution of DIRECTV programming over broadband network facilities. This could include fiber to the home (FTTH) deployments in the future based on the joint FTTP RFP recently issued in partnership with Verizon and SBC. BellSouth expects that its existing fiber-to-the-curb network will pass one million homes by the end of this year. Smith said he would continue to add capabilities to the BellSouth DSL network while rolling out more fiber into the network.
BellSouth currently offers its "Americast" digital cable service in selected communities in its service terrritory.
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- In July 2003, SBC Communications announced a partnership with EchoStar Communications to offer a co-Branded satellite TV service as part of its integrated local, long distance, wireless and DSL bundle. The deal is an exclusive telecom partnership for single-family residences throughout the SBC 13-state traditional service area, where SBC provides service to more than 56 million access lines. The two companies will begin work immediately on integrating operations, including order entry, customer service and billing, so they can begin offering customers the co-branded service in early 2004. EchoStar's DISH Network currently reaches more than 8.5 million customers nationwide. As part of the deal, EchoStar Communications issued and sold a $500 million 3.0 percent convertible subordinated note due 2010 to SBC Communications. The note is an unsecured obligation of EchoStar convertible into approximately 6.87 million shares of EchoStar's Class A Common Stock at the option of SBC ($72.82 per share), subject to adjustment in certain circumstances.
- In July 2003, Qwest Communications signed a strategic marketing agreement with DIRECTV to offer satellite TV as part of its consumer bundle of consumer services. Initially, Qwest will offer satellite TV services available to its customers in single family homes in Phoenix and Tucson, Arizona, and Seattle through DIRECTV. The company expects to rollout these services to more markets throughout the remainder of 2003 and into 2004. The partners are exploring ways to further enhance this relationship with next-generation services as well as migrating to a more integrated model in the first half of 2004 where Qwest will be the primary interface for various customer interactions including service and billing.
- Also in July 2003, Qwest signed a strategic marketing agreement with EchoStar Communications under which it will offer the DISH Network satellite TV services available to its customers in single family homes in Colorado and Nebraska. Qwest currently offers multi-channel video entertainment to approximately 64,000 customers using a variety access methods, including VDSL, satellite and HFC.
