DIRECTV 2007 Annual Report Download - page 17

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THE DIRECTV GROUP, INC.
Infrastructure
Satellites. We currently have a fleet of ten geosynchronous satellites, including nine owned
satellites and one leased satellite. We have seven Ku-Band satellites at the following orbital locations:
101WL (three), 110WL (one), 119WL (one), 72.5WL (one), and 95WL (one-leased). We also
have three Ka-Band satellites at our 99WL (one) and 103WL (two) orbital locations. The 72.5WL
orbital location is used pursuant to an arrangement with Telesat Canada. As a part of the arrangement
with Telesat, we have transferred three satellites, one of which is no longer used as it was de-orbited at
the end of its service life and two of which are nearing the end of their useful lives, to orbital locations
controlled by Telesat, for use by Telesat for its own services in Canada.
Satellites To Be Launched. DIRECTV 11 has finished construction and is planned for launch in
early 2008. DIRECTV 11 will operate from our 99WL orbital location after successful completion of
in-orbit testing. DIRECTV 11 will provide us with increased capability for local and national HD
channels, as well as capacity for new interactive and enhanced services once it becomes operational.
DIRECTV 12 is under construction and will be ready for launch in the second half of 2009.
Satellite Risk Management. We use launch and in-orbit insurance to mitigate the potential financial
impact of satellite fleet launch and in-orbit failures unless the premium costs are considered to be
uneconomical relative to the risk of satellite failure. The insurance generally does not compensate for
business interruption or loss of future revenues or subscribers. We rely on in-orbit spare satellites and
excess transponder capacity at key orbital slots to mitigate the impact of a potential satellite failure on
our ability to provide service. However, programming continuity cannot be assured in all instances or in
the event of multiple satellite losses.
Launch insurance typically covers the time frame from ignition of the launch vehicle through
separation of the satellite from the launch vehicle. In the past, we have launched satellites without
insurance. We expect to purchase launch insurance for DIRECTV 11. We do not currently expect to
purchase in-orbit insurance for satellites to be launched. As of December 31, 2007, the net book value
of in-orbit satellites was $1,552 million, of which $1,327 million was uninsured.
Digital Broadcast Centers. To gather programming content, ensure its digital quality, and transmit
content to our satellites, we have built two digital broadcast centers, located in Castle Rock, Colorado
and Los Angeles, California. These facilities provide the majority of our national and local standard-
definition and HD programming. We have also built five uplink facilities which are used to provide HD
local channels. Our broadcast centers receive programming from content providers via satellite, fiber
optic cable and/or special tape. Most satellite-delivered programming is then digitized, encoded and
transmitted to our satellites. We designed each broadcast center and uplink facility with redundant
systems to minimize service interruptions.
Installation Network. DIRECTV HOME SERVICESthird party installation and service network
performs installation, upgrades and other service call work for us. For the year ended December 31,
2007, these HSPs performed approximately 94% of all in-home visits with over 17,000 technicians from
13 outsourced companies around the United States. In addition, we and our retailers also utilize
employer-based or contract installation providers, which perform the remainder of all new professional
subscriber installations. We set the quality of installation and service standards, perform quality control,
manage inventory and monitor the overall service network performance for nearly all of the third party
installation network.
Customer Service Centers. As of December 31, 2007, we used 31 customer service centers
employing over 16,000 customer service representatives. Most of these customer service centers are
operated by Convergys Customer Management Group, Inc., Precision Response Corporation, Sitel
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