The finally successful merger of XM and SIRIUS raised some thoughts about other areas where two competing companies could merge to ease the financial load.  A prime example is in the satellite television industry where Dish Network and DIRECTV are in steep competition in all areas.  Even though they’ve already tried such a merger, the successful marriage in the satellite radio world might give way to another try. 

Gino Lattarulo of Seeking Alpha seems to share the same opinion, but doubts it would ever happen due to one key point; “I severely doubt they would get consideration for one very large reason: competition in rural areas. Satellite radio has competition from Internet, terrestrial radio, and devices like the iPod; all available for competition in just about every corner of America.  Not the case with Satellite TV, because cable is not available in these countless rural areas.”

With such a heated debate on the number of HD channels each one can offer, and the receiver technology that’s always evolving, it would actually make sense to just combine the two efforts to create one large service provider that can work together for one common cause; to provide the best satellite TV experience possibly. 

Each company is constantly launching new satellites, which is no doubt an expensive undertaking, just to provide more channel and HD capacity.  If the two were combined, the satellite capacity would far surpass what would be needed for future channels and more services.  Channels that one provider doesn’t have contracts to provide, would now be available thanks to merger.

Understandably, it would involve an enormous undertaking on behalf of both providers, but the benefits might outweigh the troubles in the long run.  When dealing in an industry that most likely wont have any future competition for a long time, why not combine efforts to strengthen it as a whole and be in an even better position to challenge cable companies in highly-competitive areas.

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Entry was posted on Wednesday, July 30th, 2008 at 3:52 pm under Opinion, Technology.

Read more entries by Justin Montgomery.
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