More subs in DirecTV's pocket

Q2 gains, Dish's downturn spark renewed merger talk

SAN FRANCISCO -- DirecTV Group continued to sign up subscribers at a healthy pace in the second quarter despite competitive and economic pressures.

Competitor Dish Network recently reported the first-ever quarterly subscriber loss for a satellite provider.

That again fueled talk of a merger. DirecTV president and CEO Chase Carey declined comment on that issue during a conference call Thursday, but said the recent merger of Sirius and XM doesn't make a deal more likely because the two businesses are very different.

DirecTV won 129,000 net U.S. subscribers, up from 128,000 a year ago. This brought its total U.S. user base to 17.2 million as of June 30.

DirecTV's overall revenue increased 16% year-over-year to $4.8 billion, helping profit climb 2% to $455 million.

"DirecTV's strong second-quarter results again point to the successful execution of our strategy to offer the nation's best television experience to higher quality subscribers," Carey said.

He had nothing new to report about the relationship with Liberty Media, which controls DirecTV via a large stake. Analysts predict Liberty will eventually take full control by merging its Liberty Entertainment arm with DirecTV.

Asked about competition from telecom and cable providers, Carey said, "We're seeing increased competitive pressures" as peers spend more to win customers. But he added: "We like our competitive position against all of them."

DirecTV's monthly user churn in the U.S. hit its lowest mark in four years at 1.5% in the second quarter. Average revenue per subscriber climbed 7% thanks in large part to growth in users buying HD and/or DVR services.

Overall, Carey said new services and solid execution will mean a strong second-half 2008 for DirecTV.

The company's stock closed up 1.5% at $27.65.
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