Dish Network 2001 Annual Report Download - page 17

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15
ECHOSTAR TECHNOLOGIES CORPORATION
EchoStar Technologies Corporation (“ETC”), one of our wholly-owned subsidiaries, internally designs and
develops EchoStar receiver systems. Our satellite receivers have won numerous awards from the Consumer
Electronics Manufacturers Association, dealers, retailers, and industry trade publications. We outsource the
manufacture of EchoStar receiver systems to third parties who manufacture the receivers in accordance with our
specifications.
We created our ETC division in connection with the development of the DISH Network. We believe that
we have an opportunity to grow this business further in the future. The same employees who design EchoStar
receiver systems for the DISH Network are also involved in designing set-top boxes sold to international TV
customers. Our satellite receivers are designed around the Digital Video Broadcasting standard, which is widely
used in Europe and Asia. Consequently, international ETC projects may result in improvements in design and
economies of scale in the production of EchoStar receiver systems for the DISH Network.
In addition to supplying EchoStar receiver systems for the DISH Network, ETC sells similar digital
satellite receivers internationally. Our satellite receivers are sold internationally either directly to television service
operators or to our independent distributors worldwide. We believe that direct-to-home satellite service is
particularly well-suited for countries without extensive cable infrastructure. We are actively soliciting new business
for ETC, but we cannot provide any assurance in that regard.
Through 2001, our two major international customers were Via Digital, a subsidiary of Telefonica, Spain’s
largest telephone company, and Bell ExpressVu, a subsidiary of Bell Canada, Canada’s largest telephone company.
For 2002, we have binding purchase orders from Bell ExpressVu and we are actively trying to secure new orders from
Via Digital for deliveries starting in the third quarter of 2002. However, we cannot guarantee at this time that those
negotiations will be successful. Our future revenue in this area depends largely on the success of these operators,
which in turn, depends on other factors, such as the level of consumer acceptance of direct-to-home satellite TV
products and the intensity of competition for international subscription television subscribers.
ETC’s business also includes our Atlanta-based EchoStar Data Networks Corporation and our UK-based
Eldon Technology Limited subsidiaries. EchoStar Data Networks is a supplier of technology for distributing Internet
and other content over satellite networks. Eldon Technology designs and tests various software and other technology
used in digital televisions and set-top boxes, strengthening our product design capabilities for satellite receivers and
integrated televisions in both the international and United States markets.
Competition for Our ETC Business
We compete with a substantial number of foreign and domestic companies, many of which have
significantly greater resources, financial or otherwise, than we have. We expect new competitors to enter this market
because of rapidly changing technology. Our ability to anticipate these technological changes and introduce
enhanced products expeditiously will be a significant factor in our ability to remain competitive. Existing
competitors’ actions and new entrants may have a material adverse impact on our revenues. We do not know if we
will be able to successfully introduce new products and technologies on a timely basis in order to remain
competitive.