DirecTV to focus on wireless

DirecTV Group, the US satellite television operator controlled by Rupert Murdoch's News Corp, said on Thursday it was “actively engaged” in finding ways to enter the growing market for wireless broadband services.

Chase Carey, president and chief executive of the biggest US satellite operator, said after announcing the group's second-quarter results that no strategy had been decided yet in this growing area but it was being focused on.

“We are actively engaged in talking to an array of parties that are participating in [wireless] broadband …about various forms of relationships,” he said, adding this could involve partnerships, alliances or investments.

DirecTV made a profit of $162m in the second quarter, its first for two years. The satellite group added fewer than expected new subscribers, with 225,000 additions, 45 per cent fewer than in the same period last year.

“Results in the seasonally weak second quarter demonstrated a continued search for a growth/profitability balance,” said Aryeh Bourkoff, analyst at UBS. “DirecTV is sacrificing subscriber growth for profitability.”

Net income was $162m, or 12 cents a share, compared with a loss of $13.3m, or 1 cent, a year earlier. Revenues rose 21 per cent to $3.19bn. Average revenue per subscriber rose 4.3 per cent to $67.79, reflecting higher prices and the selling of more services to each customer.

Mr Carey said net subscriber additions the lowest since the second quarter of 2003 were lower as a result of a “disappointing” monthly churn rate of 1.69 per cent.

The increased churn reflected tougher credit policies, which meant some of the new subscribers acquired last year were not kept on because of non-payment.

Although the churn rate would remain high in the third quarter because of similar pressures, Mr Carey said it would improve by the end of the year.