DIRECTV 2009 Annual Report Download - page 22

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DIRECTV
Installation Network. The DIRECTV home service provider, or HSP, installation and service
network performs installation, upgrades and other service call work for us. In 2008 and 2009, we
entered into several transactions that brought a significant portion of this HSP network activity
in-house. We now directly employ nearly 4,000 technicians and utilize an additional 11,000 technicians
from seven outsourced companies around the United States. The combined workforce completed
approximately 93% of all in-home visits in 2009. We set the standards for the quality of installation and
service, 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, 2009, we used 36 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
Operating Corporation, N.E.W. Customer Service Companies, Inc., VXI Global Solutions, Inc. and
Teleperformance. We currently own and operate six customer service centers located in: Boise, Idaho;
Tulsa, Oklahoma; Huntsville, Alabama; Missoula, Montana; Huntington, West Virginia and Denver,
Colorado that employ approximately 5,000 customer service representatives. Potential and existing
subscribers can call a single telephone number 24 hours a day, seven days a week, to request assistance
for hardware, programming, installation, technical and other support. We continue to increase the
functionality of telephone-based and web-based self-care features in order to better manage customer
service costs and improve service levels.
Competition
We face substantial competition in the MVPD industry and from emerging digital media
distribution providers. Our competition includes companies that offer video, audio, interactive
programming, telephony, data and other entertainment services, including cable television, other DTH
companies, telcos, wireless companies and companies that are developing new technologies. Many of
our competitors have access to substantially greater financial and marketing resources. We believe our
brand, the quality and variety of video, audio and interactive programming, quality of picture, access to
service, availability of HD and DVR services, customer service and price are the key elements for
attaining and retaining subscribers. Our over 18.5 million subscribers represent approximately 19% of
MVPD subscribers at December 31, 2009.
•Cable Television. We encounter substantial competition in the MVPD industry from cable
television companies. According to the National Cable & Telecommunications Association’s 2008
Industry Overview, 96% of the 128.6 million U.S. housing units are passed by cable. Most cable
television operators have a large, established customer base, and many have significant
investments in companies that provide programming content. Approximately 100 million
households subscribe to an MVPD service and approximately 62% of MVPD subscribers receive
their programming from a cable operator. In addition, most cable providers have completed
network upgrades that allow for enhanced service offerings such as digital cable, HD channels,
broadband Internet access and telephony services. Cable companies bundle these services,
offering discounts and providing one bill to the consumer.
•Telephone Companies. Several telcos have upgraded a significant portion of their infrastructure
by replacing their older copper wire telephone lines with high-speed fiber optic lines. These fiber
lines provide the telcos with significantly greater capacity enabling them to offer new and
enhanced services, such as Internet access at much greater speeds and digital-quality video. For
example, Verizon announced that at the end of 2009, it had the capability to serve 15 million
homes with fiber optic lines with the goal of having the capability to serve 18 million homes by
the end of 2010. In addition, AT&T has begun deploying fiber optic lines to neighborhoods and
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