ECHOSTAR AND THOMSON SIGN AGREEMENT
Thomson signed OEM agreement with EchoStar to build satellite receivers for its Dish Network. Pact, which was being negotiated before EchoStar’s proposed $26 billion bid for Hughes Electronics and DirecTV subsidiary, calls for production to start at Thomson’s Juarez, Mexico, factory by midyear. Agreement doesn’t include RCA branded product, Thomson spokesman said.
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Under agreement, Thomson will build receivers for EchoStar’s current line and start development of products that presumably will be compatible with both Dish Network and DirecTV. Thomson and EchoStar officials declined comment on specific product plans, but EchoStar developed model 301 receiver with plan to add DirecTV service should proposed acquisition be completed.
“We plan to roll out these products [those that can receive Dish and DirecTV] before the merger is approved so there is no need to go back to the consumer’s house,” EchoStar CE Charles Ergen said. “Until the merger is approved we will both be only able to control our own subscribers.”
Thomson, which introduced new line of DirecTV receivers last fall including model with component video input, currently builds standalone DirecTV receivers and combo DirecTV/UltimateTV product at Juarez plant. In Europe, Thomson supplies DVB-compliant satellite receivers to Canal Plus, whose parent Vivendi Universal recently made $1.5 billion investment in EchoStar, as well as Via Digital in Spain. Thomson’s Juarez facility opened in 1993, year before launch of DirecTV service and has expanded several times since, although Thomson spokesman declined comment on annual capacity. Facility isn’t expected to expand to handle EchoStar product, Thomson spokesman said. It also assembles TVs and cable modems. DirecTV spokesman declined comment on EchoStar agreement, but maintained company will continue to have “a very strong partnership” with Thomson.