DIRECTV 2012 Annual Report Download - page 34

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DIRECTV
subscriber base, minimize churn and extend the value of our brand. Our 2014 and ISDLA-2, which we expect to be launched in the fourth quarter of 2015.
strategy involves (1) offering a fixed wireless broadband service and ISDLA-1 will become the primary satellite for PanAmericana with a substantial
(2) extending our presence by establishing an over-the-top, or OTT, increase in channel capacity from the current satellite, and ISDLA-2 is expected to
distribution platform. serve as an in-orbit spare for ISDLA-1.
•Offer Fixed Wireless Broadband. Connecting our customers to a Our principal digital broadcast centers are located in the United States and
broadband service is strategically important because we expect it will Brazil. We also have several smaller satellite uplink facilities in the region.
minimize churn and attract new subscribers. We are focused on We typically have customer service centers in each of the countries where we
selectively pursuing opportunities to acquire spectrum and expand a operate. In addition, we operate two pan-regional centers located in Colombia that
technologically robust and profitable fixed wireless broadband service in provide primary and backup customer service support to most of the PanAmericana
areas where our existing subscriber base has a weak competitive wireline region.
offering or access to broadband is limited. We currently provide fixed
wireless service in Mendoza, Argentina and Brasilia, Brazil. The fixed Competition
wireless service offered benefits to our core business through increased
pay-TV sales, improved customer satisfaction from bundled subscribers The pay television and other emerging broadband video and data markets in
as well as lowered monthly churn. We plan to expand our fixed Latin America are highly competitive. In each of our markets, we compete primarily
wireless service to several cities in Brazil. with other providers of pay television, which distribute their programming by
satellite, cable, terrestrial microwave systems, traditional over-the-air broadcasting or
•Establish OTT Distribution Platform. Extending our premium video the Internet. In addition, in certain markets we face significant competition from
experience to our customers who desire content that can be accessed illegal and informal sector pay television operations. We compete primarily on the
on demand is important as the penetration of pay television households basis of programming selection, price, technology and service.
with Internet access increases across the region. Given the strength of
our brands, the scale of our subscriber base and our strong In most of the markets in which we operate, cable television is our principal
relationships with programmers and distributors, we began to competitor. Cable operators typically offer analog services for lower monthly fees
complement our traditional video subscription service by establishing a and with lower upfront installation and connection fees than we offer. In addition,
premium OTT distribution platform in the region. Since late 2011, we the cable operators with which we compete are in various stages of upgrading their
have offered SKY Online, which enables customers to download and networks in order to provide broadband and telephony services, and in some
stream OnDemand video content to laptops, tablets and mobile markets the major cable operators are competing with us based principally on their
devices. SKY Online also offers an option for Subscription Video on offer of a ‘‘triple play’’ bundle of video, broadband and telephony services. In most
Demand service (SVOD) for a flat monthly fee. cases, they discount the value of their programming services in order to sell
broadband and telephony services.
Infrastructure In addition to competition from cable services, we face increasing competition
We currently provide services in PanAmericana and Brazil from leased from other providers of DTH services. Telefonica, the Spanish telephone company,
transponders on two geosynchronous satellites. Sky Mexico provides its services provides DTH services in Brazil, Chile, Colombia, Peru and Venezuela. Telmex
from leased transponders on a separate satellite. In addition, we lease a backup provides DTH service in Chile and Peru, and in 2009 it launched services in Brazil
satellite that serves Sky Brasil and Sky Mexico. through its affiliate, Embratel, which has since been rebranded as Claro TV. Oi, the
second fixed line incumbent in Brazil (in addition to Telefonica), launched a DTH
We have entered into a contract for the lease of two additional satellites for service in 2009. Also, in Mexico a joint venture of EchoStar Corp. and MVS
PanAmericana: ISDLA-1, which we expect to be launched in the fourth quarter of
14