lost some 102,000 subscribers on a net basis during 2008’s last quarter and about the same for the entire year, the result of increased competition from the likes of telcos rolling out pay-TV services and satellite delivery competitor DirecTV, as well as the broader problems affecting the overall economy. “In 2008, our goal was to stop getting worse,” DISH Network CEO Charlie Ergen said on their earnings conference call. “This year we’re prepared to get better.” Way to put things in perspective Charlie.

Total revenue for Q4 2008 totaled $217 million, a 24% increase over the $175 million posted for the year-ago quarter. Revenue for the entire year totaled $11.62 billion, 4.78% higher than the $11.09 billion recorded for 2007. 2008 net income rose more than 19% to $903 million ($1.98 per diluted share) as compared to $756 million ($1.68 per diluted share) in 2007.

Signs of a maturing market, pay-TV market penetration is approaching 90% and resulting in more aggressive promotional pricing across the industry, which is cutting into pay-TV margins and making it tougher to attract and retain customers, DISH said in their SEC 10-K executive summary. We suspect the emergence of Verizon and AT&T, as well as numerous smaller telco TV players are also having an impact.

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In an admission of slipping customer service, DISH management admits in SEC filings, “We have not always met our own standards for performing high quality installations, effectively resolving customer issues when they arise, answering customer calls in an acceptable time frame, effectively communicating with our customer base, reducing calls driven by the complexity of our business, improving the reliability of certain systems and customer equipment, and aligning the interests of certain third party retailers and installers to provide high quality service.”

DISH’s ability to add and retain subscribers is likely to be impaired further as AT&T has decided not to renew its distribution agreement with the company, opting instead to sign one with DirecTV. AT&T accounted for 17% of DISH’s gross subscriber additions in 2008 and 19% in Q4. The distribution agreement ended on January 31.

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