EchoStar ( DISH) is playing catch-up on prices. Starting Feb. 1, the operator of the Dish Network satellite service will raise prices on major programming packages by as much as 8%. The changes appear to outpace recent annual increases rolled out by major cable operators. EchoStar, which has long labored to position itself as the cheaper alternative to cable TV, says the new prices reflect rising programming costs. The boost illustrates how EchoStar and fellow satellite operator DirecTV ( DTV) continue to fight with cable operators for subscribers -- without using price cuts as a weapon. "Investors have been fretting over the prospect of a price war in the multichannel industry for the last 12 to 18 months," says Sanford Bernstein analyst Craig Moffett. "And they keep being surprised by the fact that it isn't materializing."
But Moffett, who assigns a headline range of 6% to 8% to EchoStar's price increases, argues they are significantly larger than recent percentage price increases announced by major cable operators. EchoStar's increases apply to its entire video bundles -- including channels that would be on digital tiers for cable operators -- while headline price increases for cable operators tend to cover basic video tiers, Moffett says. Thus, says Moffett, his 6% to 8% number for EchoStar compares with what he calls a 4.5% recent increase at Comcast ( CMCSA), the nation's largest operator of cable systems. Cablevision ( CVC), he points out, recently announced a 2.9% increase for basic programming, and increased prices for digital less than that. Comcast reported monthly average video revenue per customer of $50 in the third quarter. Cablevision, by TheStreet.com's calculation, had over $64 in average monthly video revenue per customer in the same quarter.