Dish Network 2009 Annual Report Download - page 17

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7
Satellites under Construction
As of December 31, 2009, we had entered into the following contracts to construct new satellites which are
contractually scheduled to be completed within the next year.
x EchoStar XIV. During 2007, we entered into a contract for the construction of EchoStar XIV, a DBS
satellite, which was shipped from the manufacturer to the launch site and is scheduled for launch in early
2010. This satellite has been designed with a combination of full CONUS and spot beam capacity and
could be used at multiple orbital locations. EchoStar XIV will enable better bandwidth utilization, provide
back-up protection for our existing offerings, and could allow DISH Network to offer other value-added
services.
x EchoStar XV. During 2008, we entered into a contract for the construction of EchoStar XV, a DBS
satellite, which is expected to be completed in mid-2010. This satellite will provide CONUS service and
enable better bandwidth utilization, provide back-up protection for our existing offerings, and could allow
us to offer other value-added services.
In addition, we have agreed to lease capacity on two satellites from EchoStar that are currently under construction.
x QuetzSat-1. During 2008, we entered into a ten-year transponder service agreement with EchoStar to lease
24 DBS transponders on QuetzSat-1, a Mexican DBS satellite being constructed by SES Latin America
S.A. (“SES”). QuetzSat-1 is expected to be completed during 2011 and operate at the 77 degree orbital
location. Upon expiration of the initial term, we have the option to renew the transponder service
agreement on a year-to-year basis through the end-of-life of the QuetzSat-1 satellite. Upon a launch
failure, in-orbit failure or end-of-life of the QuetzSat-1 satellite, and in certain other circumstances, we
have certain rights to receive service from EchoStar on a replacement satellite. QuetzSat-1 will enable
better bandwidth utilization, provide back-up protection for our existing offerings, and could allow us to
offer other value-added services.
x EchoStar XVI. During 2009, we entered into a ten-year transponder service agreement with EchoStar to
lease capacity on EchoStar XVI, a DBS satellite, which is expected to be completed during 2012. EchoStar
XVI will replace the satellites currently at the 61.5 degree orbital location and will allow us to offer other
value-added services. We will lease certain satellite capacity from EchoStar on EchoStar XVI after its
service commencement date and this lease generally terminates upon the earlier of: (i) the end-of-life or
replacement of the satellite; (ii) the date the satellite fails; (iii) the date the transponder(s) on which service
is being provided under the agreement fails; or (iv) ten years following the actual service commencement
date. Upon expiration of the initial term, we have the option to renew on a year-to-year basis through the
end-of-life of the satellite. There can be no assurance that any options to renew this agreement will be
exercised.
Satellite Anomalies
Operation of our programming service requires that we have adequate satellite transmission capacity for the
programming we offer. Moreover, current competitive conditions require that we continue to expand our offering of
new programming, particularly by expanding local HD coverage and offering more HD national channels. While
we generally have had in-orbit satellite capacity sufficient to transmit our existing channels and some backup
capacity to recover the transmission of certain critical programming, our backup capacity is limited.
In the event of a failure or loss of any of our satellites, we may need to acquire or lease additional satellite capacity
or relocate one of our other satellites and use it as a replacement for the failed or lost satellite. Such a failure could
result in a prolonged loss of critical programming or a significant delay in our plans to expand programming as
necessary to remain competitive and thus may have a material adverse effect on our business, financial condition
and results of operations.