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EchoStar Vows $40 Box

1/11/2008 7:00 PM Eastern

Essentially saying the product will be a loss leader, Dish Network CEO Charlie Ergen last week said that his new spin-off company will offer a digital-to-analog converter that will help consumers make the transition to all-digital TV in February next year.

New standalone technology and set-top company, EchoStar Holding, unveiled plans for its TR-40 over-the-air, digital-to-analog converter during a press conference at the 2008 International Consumer Electronics Show.

“We’re doing that because we want to take a leadership in that,” Ergen said.

He noted that there are 13 million to 15 million U.S. homes whose TV sets will essentially be rendered useless as of the all-digital deadline, claiming, “No company has really stepped up and said let’s make this transition happen. Today, EchoStar Corp. has said we will make those products available for $39.99.”

The box will be sold under the brand names of EchoStar and acquired subsidiary Sling Media for $39.99 at retail, and can be purchased via the National Telecommunications and Information Administration’s digital-to-analog converter box coupon program.

The program provides U.S. households with up to two coupons, worth $40 each, toward the purchase of eligible digital-to-analog converter boxes, which includes the TR-40.

Ergen said with its low retail cost, EchoStar Holding won’t even make money by selling the TR-40 for only $39.99, essentially the amount of the NTIA’s $40-dollar coupon.

“That means every home in America, for two TV sets absolutely free of charge, can convert to the digital transition,” Ergen said. “There is no reason the digital transition can’t take place by February 2009, and there is no reason it will cost the consumer a dime.”

Mark Jackson, president of EchoStar Holding, said that although the TR-40 will be a loss leader, it will brings customers with no pay-TV service into Dish retailers, so that these consumers can potentially be “upsold” on pay-TV service.

September