18M Subs and $1B for Broadband

New York— DirecTV Inc. said it expected to reach 18 million subscribers by the end of 2008 — and would put in place the capacity to deliver 150 channels of nationwide high-definition television programming by the end of next year.

The ambitious targets were laid out at the first formal meeting that DirecTV executives have held with investors since Rupert Murdoch’s News Corp. acquired control at the end of 2003.

In presentations at the Sheraton New York Hotel, DirecTV CEO Chase Carey, chief technology officer Romulo Pontual and other executives said the company would:

  • Add just under a million subscribers per year, through 2008.
  • Target customers at “weaker’’ cable systems; people moving to new homes; apartment dwellers; households in the markets served by telephone company partners; ethnic audiences; and specific audiences, such as sports and music fans, to reach the annual goal.
  • Likely achieve $2.1 billion in free cash flow in 2008.
  • Raise the service’s prices roughly 4% a year.
  • Tighten credit policies and require one- and two-year commitments of new customers.
  • Have the capacity to offer 150 national HDTV channels by the end of 2007.
  • Roll out high-definition television service to 24 markets in April, including Baltimore, Cleveland and Denver.
  • Invest as much as $1 billion in a company that would provide a high-speed Internet access, as an alternative in the United States to cable companies or telephone companies.
  • Discuss ways to deliver that access wirelessly, with a variety of potential spectrum and technology partners.
  • Establish no deadline for creating any partnerships.

Technology companies with significant stakes in the evolution of high-speed Internet access include chipmaker Intel Corp., phone gear maker Alcatel, wireless gear pioneer Qualcomm Inc. and video game system maker Sony Corp.

“Spectrum” companies could include cellular communications companies such as Verizon Wireless or Cingular Wireless; or “broadband wireless” system builders, such as wireless entrepreneur Craig McCaw’s ClearWire Inc.

“We are in active discussions with an array of partners,’’ Carey acknowledged, but would not comment on any specific companies that might end up in the partnership.