# Similarities between DBS and cell phone business



## Mark Holtz (Mar 23, 2002)

Anyone finding similarities between the cell phone business and the DBS business? Consider this...

When DBS first came out, you had to purchase the equipment at several hundred dollars, then purchase the programming package. The deals are now that you get the equipment with a 12 month commitment. Along the way, technology got better, with the 301s being slim units, and the 501/508s being PVRs (verses the 1000s).

In the beginning of cell phones, they were analog and either big and bulky "luggables" or permamently installed in your car. The equipment cost several hundred dollars, and you have a rate plan that charged you by the minute. Now, cell phones are portable, and while you pay sales tax on the unactivated price of the phone (~$250), you get a free phone with a 12-24 month commitment. (With Verizon, it was 12 months about 3 years ago, now it's 24 months). While the plans are limited on the peak usage (6 AM-8 PM Mondays-Fridays), they're virtually unlimited on the weekends.

Thoughts?


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## EricG (Mar 28, 2002)

I agree. The cell phone industry figured out they would do better selling the service rather than hardware. It's all about monthly recurring income. They subsidize the hardware to get you hooked. The only problem with DBS is that the customer service is so awful they may lose customers.


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## RichW (Mar 29, 2002)

Another similarity is that both businesses continue to go through a consolidation. Mergers have taken place in the cell business and there is pressure for ther FCC to lift ownship caps on the amount of wspectrum each company can claim.


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## jegrant (Mar 24, 2002)

Actually, I wish the satellite radio industry would skip ahead to the point where they are selling the service not the hardware. That is where they need to be, IMO, ASAP!

On a scale of 1 to 10, 1 meaning no interest in sat radio at all, and 10 meaning already been signed up with both companies since the first day they went on the air, I am at a 2 or 3 right now, but would jump up to a 7 or 8 if they'd offer a term commitment with free or drastically reduced cost hardware. If I could get a satellite radio for $50, say, with a 12 to 24 month commitment, that would be an attractive offer.

Also I have to wonder will we ever get to the point of "prepaid" DBS TV or even sat radio?
Imagine this: for "high credit risk" type customers, offer a full price receiver with no commitment (I am guessing this would be around $200 to $300) then sell "disposable" access cards that only authorize a specific package for a limited time and then "self destruct" somehow.
They could even sell "PPV Cash" cards that (when inserted into a 2nd slot on the receiver) would credit your receiver with the face value of the card, to spend on any PPV. This might also be an attractive solution for those who can't, don't, or won't connect their receiver to a phone line.


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## minnow (Apr 26, 2002)

Another similarity between the two is that they both advertise service that they don't necessarily deliver. For example, cell phone coverage maps that show widespread coverage when in fact signal strength is poor to non-existent in many area's contained within their maps. And satellite advertising local channels and perfectly functioning equipment when the reality is local channels available in large metropolitan areas only and PVR's (Dish) that are pieces of unreliable crap.

And speaking of locals in large Metro area's only - it's always boggled my mind that the satellite providers would provide the metro area's first with their local feeds and totally ignore those of us in the woods or suburbs when in fact those of us in these areas can only get our "locals" via cable. This is in contrast to our metropolitian cousins who can get their locals crisp and clear(for the most part) with a antenna and who really don't need Dish or Direct for this service. And I also fully realize that it's a money issue based on the number of potential customers. Of course this will all be moot if the merger happens cause Charlie promised every local to every customer(bullsh-- !).


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