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Dish Drops 102,000 Subs In Q4

Dish Network lost 102,000 net subscribers in the fourth quarter of 2008, and the company warned its customer count may continue to contract now that AT&T has terminated the reseller deal with the satellite TV operator.

Dish reported total revenue of $2.92 billion for the quarter ended Dec. 31, up 1% from the year prior, and net income of $217 million compared with $175 million during the corresponding period in 2007.

Dish had 13.678 million subscribers at year-end, which was a net decline for the full year of also approximately 102,000. 

The company blamed the subscriber losses on numerous factors, outlined in its annual 10-K filing Monday, including: "weaker economic conditions, aggressive subscriber acquisition and retention promotions by our competition, heavy marketing by our competition, the growth of fiber-based and Internet-based video providers, signal theft and other forms of fraud, and operational inefficiencies at Dish Network."

AT&T's distribution deal with Dish officially ended Jan. 31, 2009, and the telco now resells DirecTV service in areas of its 22-state footprint where it does not offer U-verse TV.

In its 10-K, Dish said the distribution through AT&T "was a substantial contributor to our gross and net subscriber additions over the past several years," accounting for about 17% of gross subscriber additions for the year ended Dec. 31, 2008, and 19% of gross subscriber additions in the fourth quarter.

About 1 million of Dish's current subscribers were acquired through AT&T. These subs, the company said, have "historically churned at a higher rate than our overall subscriber base."

"Although AT&T is not permitted to target these subscribers for transition to another pay-TV service and we and AT&T are required to maintain bundled billing and cooperative customer service for these subscribers, these subscribers may still churn at higher than historical rates following termination of the AT&T distribution relationship," Dish said.

For the year Dish reported total revenue of $11.62 billion compared with $11.09 billion for the year ended Dec. 31, 2007, an increase of 5%, and net income was $903 million, compared with $756 million the year prior.