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DBS Recycling of STBs Creates New Trend

Direct Broadcast Satellite (DBS) providers have traditionally left their customers' purchases of the required set-top box (STB) to the open retail environment. But in a quiet change of tack, some have begun introducing STB lease or buyback schemes reminiscent of cable operators' arrangements. This trend has led ABI Research to revise its STB shipment forecasts for the immediate future.

"ABI Research's forecasts for STB shipments have been revised to reflect the new trend towards 'recycling' satellite service STBs," notes principal analyst Michael Arden. "Our current figures anticipate STB shipments of just 46.11 million in 2006, as opposed to 2005's figure of 50.78 million."

By 2011, however, the forecasts are more bullish, showing a recovery to 53.72 million units. Much of that growth, says Arden, will come from shipments in Asia, Western Europe and the Middle East, and will be due to subscriber growth as well as upgrades of existing STBs in the home, in order to support advanced video services.

Some DBS providers are positive about the numbers of STBs they expect to recycle, citing hoped-for exchange rates of 80 percent or more. ABI Research believes such estimates are optimistic, however, and proposes that the average STB recycle rate will typically be closer to 30 to 40 percent.

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