DIRECTV 2010 Annual Report Download - page 19

We understand how to do business in Latin America and know how
to do it profitably. We have kept an eye on churn, maintained our
economics and achieved an impressive subscriber and revenue annual
growth rate of approximately 25 percent in 2010.
sustaining our momentum
After such a great run of growth in subscribers, revenue and return on
invested capital, it’s fair to ask: Can we sustain it?
The answer is yes, for the following reasons:
• We have the advantage of scale as the region’s largest pay-TV
operator and are able to pursue new growth opportunities from
a position of strength.
• Our market share gains have produced one-third of our revenue
growth—the result of better execution and better products and
branding, all things at which we will continue to excel, with the
rest of it coming from overall market growth.
• Satellite technology in Latin America is even more of an
advantage than it is in the United States. Our competition is
much less formidable there and our satellites cover the entire
region with a low cost-per-home-passed and uniform technology
that affords us the ability—like the U.S.—to upgrade our entire
customer base at once. And the continental footprint allows
us to negotiate with program suppliers on a region-wide basis,
as opposed to a country-by-country basis, enabling us to take
full advantage of our scale and obtain volume discounts that we
believe many of our competitors cannot match.
one integrated company
I want to emphasize again, scale plays an important role for DIRECTV.
It is critical for DIRECTV U.S. and DIRECTV Latin America to operate as
one integrated company. From our technology and costs to market, to
our programming, there are tangible synergies that are paying off both
for our competitiveness and bottom line.
While we share many of the products and services that make
DIRECTV the best video experience in the world, we are also
constantly learning from each other, like sharing segmentation
marketing strategies or best practices. For example, by leveraging
set-top box technology developed for the U.S., we can introduce
products and services to Latin America with greater speed, at lower
cost and with better quality than any of our competitors.
Latin America is fertile ground for continuing growth and profitability.
We have the tools to win in the market with the best products, a
broad range of offers that can serve all segments of the market, and
of course the leading brand. And supporting all of this is a world-class
customer service organization and a team of experienced, talented
executives, who know how to take advantage of this large and
growing opportunity.
commitment to success
In thinking about the future of our business, I can say with complete
conviction, after spending the better part of a year looking at our
company inside out, from top to bottom, listening and learning, we have
a clear strategy, a strong vision and a set of achievable goals to win in the
marketplace. And I know my executive team feels the same way.
We believe we can reach the 30 million mark in combined customers,
excluding Mexico, over the next three years and generate revenue in the
range of $30 billion. Over that same period of time, our earnings should
grow to over $5 per share in part as we expect to buy back more than a
third of our shares. In short, we have set the stage for a bright future
and industry-leading returns on our invested capital.
And that future is in the collective hands of all of us at DIRECTV.
From day one I have been enormously impressed with the quality of our
employees, the passion they have for their jobs and their commitment
to our success as a company. It is critical that we maintain this level of
quality in our people, so I made it one of my top priorities when I joined
DIRECTV to focus on developing the tremendous talent we have and a
dedication to teamwork.
This is very important to me personally and I believe it is absolutely
essential to our success as an organization. To lead this effort, we
brought in a world-class head of human resources, Joe Bosch. With his
depth of experience in talent development and driving organizational
performance, he brings a fresh perspective to the task at hand—
ensuring that we are developing the next generation of talent. He ran
our first leadership program last October and we are looking forward to
more of the same this year.
I would also like to applaud our board of directors whose leadership
and good counsel were invaluable to me as I learned the ropes of this
highly complex business. I especially want to thank five of our former
directors, who left the board last year: our former chairman, Dr. John
Malone; Paul Gould; Greg Maffei; Chase Carey and Haim Saban. They
played an important role in the success of our company and helped us
stay the course during a time of transition.