Filed by General Motors Corporation
                                   Subject Company - General Motors Corporation
                                             and Hughes Electronics Corporation
                          Pursuant to Rule 425 under the Securities Act of 1933
                                       and Deemed Filed Pursuant to Rule 14a-12
                                      under the Securities Exchange Act of 1934
                                                 Commission File No.: 001-00143

The following is a transcript of a conference call made available on Hughes' web
site beginning January 17, 2002. Certain text contained within the transcript
has been bracketed because it was inaudible or for clarification purposes.

In connection with the proposed transactions, General Motors Corporation ("GM"),
Hughes Electronics Corporation ("Hughes") and EchoStar Communications
Corporation ("EchoStar") intend to file relevant materials with the Securities
and Exchange Commission, including one or more Registration Statement(s) on Form
S-4 that contain a prospectus and proxy/consent solicitation statement. Because
those documents will contain important information, holders of GM $1-2/3 and GM
Class H common stock are urged to read them, if and when they become available.
When filed with the SEC, they will be available for free at the SEC's website,, and GM stockholders will receive information at an appropriate time
on how to obtain transaction-related documents for free from GM. Such documents
are not currently available.

GM and its directors and executive officers, Hughes and certain of its officers,
and EchoStar and certain of its executive officers may be deemed to be
participants in GM's solicitation of proxies or consents from the holders of GM
$1-2/3 common stock and GM Class H common stock in connection with the proposed
transactions. Information regarding the participants and their interests in the
solicitation was filed pursuant to Rule 425 with the SEC by GM and Hughes on
November 16, 2001. Investors may obtain additional information regarding the
interests of the participants by reading the prospectus and proxy/consent
solicitation statement if and when it becomes available.

This communication shall not constitute an offer to sell or the solicitation of
an offer to buy, nor shall there be any sale of securities in any jurisdiction
in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities Act of 1933,
as amended.

Materials included in this document contain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that could cause our actual results to be materially different
from historical results or from any future results expressed or implied by such
forward-looking statements. The factors that could cause actual results of GM,
EchoStar, Hughes, or a combined EchoStar and Hughes to differ materially, many
of which are beyond the control of EchoStar, Hughes or GM include, but are not
limited to, the following: (1) the businesses of EchoStar and Hughes may not be
integrated successfully or such integration may be more difficult,
time-consuming or costly than expected; (2) expected benefits and synergies from
the combination may not be realized within the expected time frame or at all;
(3) revenues following the transaction may be lower than expected; (4) operating
costs, customer loss and business disruption including, without limitation,
difficulties in maintaining relationships with employees, customers, clients or
suppliers, may be greater than expected following the transaction; (5)
generating the incremental growth in the subscriber base of the combined company
may be more costly or difficult than expected; (6) the regulatory approvals
required for the transaction may not be obtained on the terms expected or on the
anticipated schedule; (7) the effects of legislative and regulatory changes; (8)
an inability to obtain certain retransmission consents; (9) an inability to
retain necessary authorizations from the FCC; (10) an increase in competition
from cable as a result of digital cable or otherwise, direct broadcast
satellite, other satellite system operators, and other providers of subscription
television services; (11) the introduction of new technologies and competitors
into the subscription television business; (12) changes in labor, programming,
equipment and capital costs; (13) future acquisitions, strategic partnership and
divestitures; (14) general business and economic conditions; and (15) other
risks described from time to time in periodic reports filed by EchoStar, Hughes
or GM with the Securities and Exchange Commission. You are urged to consider
statements that include the words "may," "will," "would," "could," "should,"
"believes," "estimates," "projects," "potential," "expects," "plans,"
"anticipates," "intends," "continues," "forecast," "designed," "goal," or the
negative of those words or other comparable words to be uncertain and
forward-looking. This cautionary statement applies to all forward-looking
statements included in this document.


                            Moderator: Jonathan Rubin
                                January 15, 2002
                                   1:00 pm CT

Operator: Good day and welcome to today's Hughes Electronics Corporation 2001
         Fourth Quarter and Year-End Earnings Results Conference Call. Today's
         conference is being recorded.

         At this time, for opening remarks and introductions, I would like to
         turn the conference over to your Vice-President of Investor Relations,
         Mr. Jon Rubin. Please go ahead.

Jon Rubin: Thank you operator. And thank you everyone for joining us for
         our fourth quarter 2001 earnings conference call. With me today on the
         call are Jack Shaw, our President and CEO, Eddy Hartenstein, Chairman
         and CEO of DIRECTV, Roxanne Austin, President and COO of DIRECTV, Mike
         Gaines, our CFO, Kevin McGrath, Chairman of DIRECTV Latin America, Pat
         Doyle, our Controller and Treasurer, and the CFOs from our major
         businesses, and Peter Standish, our outside regulatory lawyer from Weil
         Gotshal [and Manges].

         Before we proceed, I would like to remind you that our use of the words
         expect, anticipate, project and similar expressions are intended to
         identify forward-looking statements. While these statements represent
         our current judgment on what the future may hold, and we believe that
         they are reasonable, actual results may differ materially due to
         important factors, including those described in our SEC filings and in
         General Motors' SEC filings.

         And now I would like to turn the call over to Jack Shaw for a few
         opening comments.

Jack Shaw: Thank you Jon. And thanks to everyone for joining us on the call
         this morning. Our fourth quarter results clearly indicate that HUGHES
         continues to make excellent progress toward our goal of improving
         operational performance, while meeting or exceeding the financial
         commitments we have made to you.

         The DIRECTV businesses in both the United States and Latin America are
         beginning to reap the benefits from the decisive actions we took to
         lower our subscriber acquisition costs and churn rates.

         At the same time, especially in the United States, new subscriber
         additions continue to exceed expectations. Hughes Network Systems, or
         HNS, had its best quarter ever in terms of revenue, and helped DIRECTV
         meet the strong demand for its services, by shipping over 800,000
         DIRECTV systems in the quarter.

         And PanAmSat increased their EBITDA margin by nearly three percentage
         points, to 68% in the fourth quarter, versus the third quarter, a
         partial dividend of their strategy to refocus on their core video
         broadcast businesses, and reduce operating expenses.

         As you know, we now have new leadership in many of our key operating
         areas. And it gives me a great deal of pleasure to see that we are
         making huge strides towards instilling a culture at HUGHES that places
         top priority on meeting or exceeding our financial commitments.

         This new management team has done just that for two consecutive
         quarters. And as I have shared with you in the past, I believe that
         this is absolutely critical for us to boost our credibility and
         increase the value of our company.


         With 2001 behind us, I thought it might be helpful to take a quick look
         ahead and give you my top priorities for HUGHES in 2002. This will be a
         year in which you can expect to see HUGHES continuing to deploy a back
         to basics approach, which in each of our businesses will be focusing on
         their core operations, improving financial returns, and reducing cash

         For example, DIRECTV in the US expects to have a stellar year, by
         bringing over a million new subscribers. However, we will have an even
         greater focus on improving our churn and lowering our subscriber
         acquisition cost, to ensure that we more than double our EBITDA this

         And in Latin America, our goal of reaching EBITDA break-even this year
         has become significantly more difficult as a result of the recent
         devaluation of the Argentinean currency. Kevin McGrath and his team are
         taking steps to mitigate the impact of this situation, and he will be
         discussing these in more detail in a few moments.

         At HNS, we are targeting EBITDA break-even in the core broadband
         products and service division, even as it anticipates adding 100,000 to
         200,000 new DIRECWAY residential subscribers. And in the set top box
         area, HNS is committing to doing whatever it takes to help DIRECTV be
         more competitive and meet their objectives.

         PanAmSat will continue to reduce its operating expenses and investment
         in new initiatives, to increase its EBITDA margins to 70% or greater.
         Hopefully many of you had the opportunity to listen to PanAmSat's call
         yesterday, when they provided a lot more detail on their strategies.

         With these goals, I am confident we will be able to carry into 2002 the
         momentum we established during the second half of 2001. We all
         understand that we are at the very beginning of a long journey to
         unlock the tremendous value residing in the HUGHES businesses. I
         believe that what we have accomplished over the past two months(1) is
         proof that we are on the right track.

(1)  Mr. Shaw intended to say "quarters", not "months".


         Before turning the call over to Mike Gaines, I would like to give you a
         brief update on our transaction with EchoStar. Initial filings with the
         Department of Justice, IRS and FCC have all been completed. As
         expected, we received the DOJ's second request for additional
         information last month. And we are responding to their inquiries. This
         process with the DOJ is anticipated to continue for a couple of months.

         And efforts on the Hill were kicked off in December, as Charlie Ergen
         and Eddy Hartenstein testified on the benefits of the merger [before]
         two House [sub]-committees.

         In summary, I think it is fair to say that at this point in the
         regulatory process, everything is going about as we had expected. We
         knew that the regulators would ask lots of questions, and we knew that
         there would be many people making self-serving comments against the

         However, we are pleased by the support that we received from several
         important constituencies, including the American Farm Bureau
         Federation, the Consumer's Union, the National Taxpayer's Union, and
         Citizens for a Sound Economy.

         In general, there haven't been any big surprises, and we remain
         confident that this merger will be completed.

         I think it is important to mention one more thing. In the unlikely
         event that the merger does not receive regulatory approval, I am
         absolutely convinced that HUGHES will be a very strong company, with
         many new strategic options available to increase value.

         I hope it has become clear to you, based upon our performance in recent
         quarters, that my primary objective is to get HUGHES' operations up to
         world class standards, so that the businesses will thrive under any
         scenario. With that, I will turn the call over to Mike Gaines.


Mike Gaines: Thanks Jack. Let me start with a quick overview of our
         financial performance. HUGHES' revenue for the fourth quarter came in
         at nearly $2.3 billion, about 11% higher than the fourth quarter of
         last year.

         The primary drivers of this revenue growth were the continued growth of
         the DIRECTV subscriber bases, in both the US and Latin America, as well
         as increased sales in DIRECTV receivers and DIRECWAY systems at HNS.

         With EBITDA of $118 million in the quarter, each of our businesses had
         better operating performance versus last year. I think it is important
         to note that we met HUGHES' overall EBITDA guidance, despite a $29
         million charge related to the devaluation of the Argentinean peso.

         The operating improvements were also offset by $32 million of EBITDA
         losses from the DIRECTV DSL service, which were not included in last
         year's results, and a favorable adjustment to corporate expenditures
         made in the fourth quarter of 2000, primarily related to pension and
         other employee costs. A detailed discussion of our revenue and EBITDA
         results will be provided in a moment by our business unit leaders.

         Now let's review HUGHES' balance sheet and liquidity position. As of
         the end of the fourth quarter, our cash balance was $700 million, which
         is unchanged relative to the third quarter. Total debt was $2.6
         billion, which is approximately $800 million higher than our debt
         balance as of last quarter.

         During the quarter, we used our corporate credit facility to fund most
         of our fourth quarter cash needs of approximately $800 million, which
         included cash requirements from operations, as well as the $500 million
         payment to Raytheon related to the previously announced purchase price
         adjustments to the 1997 sale of HUGHES' Defense business.


         Looking ahead to 2002, funding for the expected $1.5 to $1.7 billion of
         consolidated HUGHES cash requirements will come primarily from the
         PanAmSat repayment to HUGHES of the $1.725 billion loan that has been
         in place since the merger between HUGHES and PanAmSat in 1997. We are
         anticipating these cash proceeds within the next couple of months.

         And as we indicated on last quarter's call, we expect to be free cash
         flow break-even in 2003. Now let's take a quick look at selected
         financial targets for the first quarter and full year 2002.

         In general, aside from any potential impact of the Argentinean crisis,
         full year 2002 guidance is unchanged. And since the complete guidance
         is posted on the HUGHES web site, I will just touch on some of the
         highlights for the first quarter.

         DIRECTV US is forecasting first quarter net subscriber additions to
         range between 200,000 and 250,000. In terms of calendarization, this is
         in line with our full year forecast of 1[million] to 1.2 million net
         new subscribers, since the first quarter historically accounts for
         roughly 20% of our full year total.

         First quarter revenue is expected to be approximately 1.425 billion
         [dollars], with EBITDA of $80 [million] to $100 million. In Latin
         America, excluding any impacts on the peso devaluation in Argentina, we
         expect to add about 40,000 new customers, generate revenue of about
         $190 million, and have an EBITDA loss of roughly 20 million [dollars].

         PanAmSat is targeting first quarter revenue of 200 [million] to 205
         million [dollars], with 70% or better EBITDA margins. And HNS
         anticipates generating between $225 [million] and 250 million in
         revenue, with negative EBITDA of $30 [million] to 40 million. Adding it
         all up, we get an estimate for total HUGHES first quarter revenues of
         1.95 [billion] to 2 billion [dollars], and an EBITDA range of 100
         [million] to 150 million [dollars].


         Now I would like to turn the call over to Roxanne for a few comments on
         DIRECTV US.

Roxanne Austin: Thanks Mike. Without a doubt, 2001 was a year punctuated by
         tremendous change at DIRECTV. During the second half of the year we
         made dramatic changes across the entire organization, placing new
         people at virtually every key operational leadership position.

         And the leadership has implemented new, innovative policies, that have
         really changed the strategic force of our business. Moving from a
         primary focus, on subscriber growth, to a new emphasis on disciplined,
         profitable, customer acquisition, retention and satisfaction.

         The strategic changes that we made last year were all designed to
         accomplish one or more of the following goals: first, to reduce
         subscriber acquisition cost, or SAC; second, to increase customer
         retention and satisfaction; and third, to improve our financial return.

         Although we are still a ways off from declaring victory, DIRECTV's
         fourth quarter results are a validation of the new strategy. During the
         quarter, we added approximately 910,000 gross subscribers. And after
         accounting for customer churn, 405,000 net new subscribers.

         Today, with more than 10.7 million subscribers, nearly one in every
         nine t.v. households in the country receives DIRECTV television
         programming. We feel pretty good about this quarter's performance,
         especially given the soft economy, the fact that we made a major change
         in our consumer offer, implementing annual commitments at retail, and
         of course we announced the merger with EchoStar.

         The churn rate in the fourth quarter was approximately 1.6%. In fact,
         churn improved sequentially during each month of the quarter. There are
         two primary reasons for the improvement in churn.


         One, we are seeing lower churn rates as a result of the investment we
         made to improve all aspects of our customer service. At DIRECTV, we
         believe that superior customer service is the cornerstone of any
         successful consumer service.

         During the quarter, we added additional customer service
         representatives at our call centers, and additional installers to our
         home services network. As a result of these additions, and our new
         initiatives, we continued to achieve significant improvements in these
         areas throughout the quarter, and we are now meeting virtually all of
         our key customer service and installation targets.

         The second reason for the decline in churn relates to our new customer
         offer. For the first time in DIRECTV's history, customers are now
         required to commit for 12 months of service in order to receive the
         promotional benefits of the existing offer.

         This gained traction during the quarter. And most recently, well over
         80% of our new subscribers opt for the 12-month commitment. The
         12-month commitment should significantly help with churn in 2002, since
         a disproportionate amount of the customer's churn occurs in the early
         months of the subscriber's life.

         We expect this type of customer commitment to be the standard part of
         our offer going forward. In addition, we have expanded channel
         capacity, and improved DIRECTV service offering, with the recent launch
         of the new satellite.

         Late last year, we successfully launched and put into service our new
         DIRECTV 4S Spot-Beam satellite. This was a highlight of 2001, and a
         tremendous team effort. The schedule was tight, and there was
         absolutely new room for error. I can say that our team executed


         With the additional capacity to broadcast 220 new channels, this
         satellite allows us to comply with the "Must Carry" requirement, and
         gives us the ability to offer all local channels in the 41 markets
         where we offer local stations.

         Additionally, local channels in all 41 markets are now being offered
         from our primary orbital slot at 101 degrees west longitude, requiring
         no change in customer equipment. We expect it to improve our local
         channel penetration rate across the board, but especially in the 12
         markets that formerly received local channel broadcasts from the 110
         and 119 degree slots.

         Over the course of 2002, we expect to add local channel service in ten
         new markets, bringing the total number of markets served with local
         channels to 51, or 67% of the nation's television households. These ten
         markets will be broadcast from the 119 degree slot.

         From a consumer's perspective, in terms of both additional channels and
         new markets, this significantly improved DIRECTV's value proposition.
         For 2002, we see the expanded local service as a catalyst for continued
         improvement for churn and growth, since we truly now are a complete
         replacement for cable in these markets.

         Revenues for the fourth quarter were 1.5 billion [dollars], a more than
         12% improvement over the fourth quarter last year. Average [monthly]
         revenue per customer or ARPU was 58.70 [dollars] for the quarter,
         versus 59.90 [dollars] last year. The lower ARPU in the quarter was
         primarily due to lower package revenue, and fewer pay-per-view movie

         For the full year, ARPU was 56.10 [dollars], compared to 55.30
         [dollars] last year. This increase was a result of the full year impact
         in 2001 of the price increase that we implemented in 2000. Both the
         quarterly and full year results met our expectations.


         Bear in mind that ARPU is seasonally higher in the fourth quarter,
         since the majority of the revenues from our most popular NFL Sunday
         Ticket is recorded during this period.

         During 2002, we expect ARPU to be roughly flat with 2001's level.
         Although the lower package revenue and declining pay-per-view levels
         place downward pressure on ARPU, we hope to offset these through
         initiatives such as our enhanced local channel service offerings, and
         the recently announced package simplification program.

         Consistent with our guidance, SAC for basic receivers was $560 per
         gross subscriber addition during the quarter, similar to SAC in the
         third quarter. In 2002, we expect SAC on our basic receivers to drop to
         approximately $525. The anticipated improvement is due primarily to the
         elimination of the box subsidy we have been paying the manufacturers of
         DIRECTV equipment.

         However, we are also expecting to continue to see improvements in SAC
         due to changes in our business practices. In order to combat piracy and
         reduce the cost associated with non-activation, we implemented a card
         out of box program with our mass merchant retail partners.

         Under this program, the customer only receives an access card from
         DIRECTV after calling to set up an account for service. In our other
         retail channels, such as the large consumer electronics retailers, we
         first implemented activation agreements that require a customer to
         commit to activate his or her account, or face a financial penalty.

         And of course going forward, our compensation to retail is tied to
         securing a commitment from the customer to activate and retain service
         for a minimum of one year.

         We believe these initiatives significantly reduce the costly
         inefficiencies in our business, and support our goal of profitable
         customer acquisition, retention and satisfaction. You can be sure that


         we are not stopping here, and we are looking for every possible way to
         continue to lower our SAC.

         Pre-marketing cash flow was 38% of revenue for the quarter, and 39% of
         revenue for the full year. In the fourth quarter, pre-marketing cash
         flow tends to be lower, primarily due to the impact of the lower margin
         NFL revenue. In 2002, we expect full year pre-marketing cash flow to be
         at about the 2001 levels.

         EBITDA was 63 million [dollars] in the fourth quarter, up 4 million
         from last year. The improvement was due to the higher gross profit
         generated from DIRECTV's larger subscriber base, which was mostly
         offset by increased investment in customer service.

         I would also like to point out that our EBITDA is higher than you would
         expect, given the substantial over-performance in subscribers.

         In 2002, we expect full year EBITDA to range between 525 [million] and
         575 million [dollars], more than double the 208 million [dollars] we
         achieved in 2001. This rapidly increasing EBITDA is not only due to
         leveraging the returns from our large and growing subscriber base, but
         also a result of the aggressive actions we took in 2001 to reduce costs
         and improve margins.

         In summary, I believe that 2001 was a turning point for DIRECTV. During
         the last two quarters, we made some hard choices, and our results
         indicate that for the most part we have made the right choices. And as
         you may have heard me say before, I truly believe we have only
         scratched the surface of unlocking the incredible store of value in

         Going into 2002, I believe DIRECTV is poised to have a breakthrough
         year. And with that, I will turn it over to Kevin McGrath for an update
         on Latin America. Kevin?


Kevin McGrath: Thanks Roxanne. DIRECTV Latin America, or DLA, added 113,000
         net new customers during the quarter, bringing our cumulative
         subscriber base to more than 1.6 million, representing a 23% increase
         over last year's total. Fourth quarter revenue was 186 million
         [dollars], a 10% improvement versus last year.

         Excluding the $29 million impact of the year-end Argentinean currency
         devaluation, EBITDA for the fourth quarter was a negative $7 million,
         compared to a loss of 43 million [dollars] in the fourth quarter of

         The improved operating performance is primarily a result of continued
         subscriber growth, decreased subscriber acquisition costs related to
         restructured dealer commissions, and reduced advertising expenses, and
         significant reductions in operating expenses.

         Also contributing to our EBITDA improvement is our lower churn. With
         monthly churn of 2.5% in the fourth quarter, churn fell consistently
         during each quarter of 2001, despite weakening economic conditions
         throughout the year. Similar to last quarter, the solid churn
         improvement was a result of the implementation of a more selective
         subscriber acquisition process, and improved customer retention

         Churn is expected to remain relatively flat at approximately 2.5% in
         2002, with ongoing operational improvements in the region being offset
         by increased churn, resulting from the economic situation in Argentina.

         Now with regard to the situation in Argentina, for the last decade, the
         Argentine peso has been pegged to the dollar on a one to one exchange
         rate. As a result of the current crisis, the Argentine banks closed in
         late December, thereby closing the foreign exchange markets.


         Currency trading did not resume until January 11, 2001. This resulted
         in a $29 million charge to 2001 results for Argentina, corresponding to
         a 41% devaluation, and reflects a currency translation adjustment to
         our balance sheet.

         This amount is determined by recalculating the dollar value of
         peso-denominated net assets at an exchange rate of 1.7 to 1, the new
         rate upon the resumption of currency trading on January 11, 2002.

         Now the DLA guidance for 2002 remains unchanged from previous guidance,
         but excludes the impact of the devaluation in Argentina. That impact on
         normal operations and projected World Cup revenue is still being
         analyzed in light of the continuing volatility and developments in

         Absent any mitigating actions, the impact of a 1.7 to 1 exchange rate
         in Argentina would be a reduction in full year 2002 revenue of
         approximately 80 million [dollars], and about a $50 million reduction
         to EBITDA and cash.

         To minimize that financial impact, DLA is looking at several mitigation
         strategies, including obviously price increases, invocation of currency
         meltdown clauses to secure devaluation relief from suppliers under
         dollar-based contracts, and, to the extent possible, reallocation of
         planned growth to other markets in Latin America.

         Clearly our goal is to offset as much of the EBITDA and cash impact as
         possible. However, the revenue impact cannot be fully mitigated. We
         expect to provide you with our new guidance, which will include the
         impact of the devaluation during our first quarter earnings conference

         With that, I will turn the call over to HNS' CFO, Jim Lucchese. Jim?


Jim Lucchese: Thanks Kevin. Despite challenging market conditions across
         all technology sectors, HNS met all of its quarterly financial
         commitments. Fourth quarter revenues came in at $436 million. Not only
         is this 12% above prior year, but it also represents the largest
         quarterly revenues in HNS' history.

         Sales of DIRECTV receiver systems, consumer DIRECWAY services, and
         enterprise activity all exceeded prior year results. Fourth quarter
         EBITDA of negative $14 million was consistent with expectations. To
         meet this commitment, HNS improved EBITDA significantly from the prior
         year's quarter, despite increased investments in SPACEWAY and the
         consumer DIRECWAY business.

         DIRECTV receiver systems were the primary contributor to this earnings
         improvement. As Jack indicated earlier, HNS shipped 814,000 set top
         boxes during the fourth quarter.

         This continues the favorable trend in our set top box business. After
         two quarters of being down versus prior year, primarily due to
         non-recurring shipments of PrimeStar conversions for the second quarter
         2000, HNS registered 6% growth in the third quarter, and 20% growth in
         the fourth quarter.

         This resulted in full year set top box shipments of just under two
         million, and pushed HNS above the eight million bar of cumulative set
         top box shipments. Fourth quarter shipment levels were all the more
         impressive because they were driven by the successful launch of HNS'
         next generation set top box.

         This receiver is Wink(R)-enabled, provides enhanced on-screen search
         functionality, and features caller ID to provide information on
         incoming telephone calls. It is also important to point out that within
         days of the HUGHES/EchoStar merger announcement, it demonstrated
         reception of the EchoStar signal, with a modification to its core
         DIRECTV set top box.


         HNS' consumer DIRECWAY business continues to build a subscriber base,
         and surpassed a cumulative total of 100,000 during the quarter. This
         represents a doubling of our subscriber base over the course of 2001,
         and was in line with our guidance. Marketing activities continued to
         benefit from "Powered by" relationships with leading Internet service
         providers. And we are now just beginning to reap the benefit of our
         relationship with DIRECTV.

         HNS' DIRECWAY enterprise business successfully reported year over year
         sales growth in each and every quarter of 2001, despite the difficult
         market for technology companies, particularly those offering
         communication services. Moreover, HNS believes that it will continue to
         enjoy a leading market position with enterprise customers.

         Although we have sensed a lessening of enterprise customers' decision
         cycles in response to fiscal restraints, we continue to succeed with
         cost-effective DIRECWAY solutions to meet customer needs. As a result,
         marketing activity remains healthy, and we accomplished a great deal
         during the quarter.

         For example, HNS' contract with Wendy's corporate owned sites
         illustrates the success in continuing to penetrate the restaurant
         industry, a key target market. Having already established relationships
         with all major domestic petroleum retailers, HNS joined a consortium of
         mid-market gas station and convenience store operators to provide
         equipment and value-added services.

         HNS enjoyed success further upstream in the petroleum sector through
         its agreement to provide DIRECWAY services to the oil rigs of Nabors
         Industries. HNS is also partnering with Agristar to target the largely
         rural agricultural industry, and is casting a wide net in pursuit of
         small and medium sized enterprises by partnering with WorldCom in the
         US and several players in various European markets.


         Before turning the microphone back to Jon, I want to say a few words
         about the status of the SPACEWAY program. Significant progress
         continues to be made on SPACEWAY, and excitement is growing as we get
         closer to launch. We are continuing to collaborate with Boeing on the
         spacecraft, and working diligently on developing on both the ground
         segment and user terminals.

         During the fourth quarter, we launched a broadband alliance program to
         ensure that industry leaders develop applications that take full
         advantage of SPACEWAY's superior functionality and economics.

         In summary, we remain cautiously optimistic about the health of the
         primary markets in which we compete, and we believe that we are well
         positioned to maintain or increase our share in those markets.

         Looking forward to 2002, HNS anticipates growth of at least 20% in its
         core satellite broadband business segment. Continued growth in the
         consumer DIRECWAY business will compliment the benefits of continued
         leadership with enterprise customers.

         Offsetting this growth in satellite broadband, the carrier segment
         expects 2002 sales to decrease by over one-half from prior year. Large
         projects such as XM Satellite Radio and Thuraya benefited sales during
         2001, but are now substantially complete.

         The set-top box business should remain a significant portion of our
         total sales, with sales levels that are flat to slightly positive
         compared to prior year. This results in a consolidated sales projection
         for 2002 that is flat to slightly up from prior year.


         EBITDA, however, is expected to improve significantly as the consumer
         DIRECWAY business builds critical mass, and the company continues to
         reduce both product and operating costs. With that, I will turn the
         call back to Jon.

Jon Rubin: Thanks Jim. Now let's move on to questions you may have about
         HUGHES' fourth quarter results. Keep in mind that we have members of
         the media on this call in a listen only mode. I would like to remind
         the media that they are not authorized to quote any participants on
         this call, either directly or in substance, other than the
         representatives of HUGHES.

         In addition, we are Webcasting this call live on the Internet, and an
         archived copy will be kept on our site. Finally, I would like to ask
         callers to limit your questions to only one or two until everyone has
         had a chance to ask questions. At that point, feel free to ask
         additional questions. Operator, we are ready for the first question.

Operator: Thank you. If you would like to ask a question, please press star 1 on
         your touch-tone phone. We will go first to Robert Peck with Bear

Robert Peck: Hey everybody, it is Bob Peck. I just want to ask a couple of
         quick questions. First of all, on the DIRECTV side, what percent of the
         net adds were from NRTC?

Roxanne Austin: The net ads from - the DIRECTV net ad was for 92%. That
         represents 8% for NRTC.

Robert Peck: Eight percent. Okay great. And as far as the Boeing settlement,
         has there been any more ground there on how much that could end up
         being in total for HUGHES and when we will get some resolution with

Mike Gaines: This is Mike Gaines. A couple of things. We are still going
         through the process called for by the agreement. In terms of the
         magnitude, I want to make sure it is clear that by the terms of our


         purchase price agreement with them, there was an adjustment called for
         that we both agree on, with interest. As of today, that is about $200
         million. So that is an amount we owe Boeing that is not in dispute.

         Beyond that, there is a dispute over the purchase price. And I think it
         is kind of the classic purchase price adjustment dispute. It will go to
         arbitration, and I think that will happen some time in 2002.

Robert Peck: Okay great. One last question, and I will let you go. It looked
         like the DSL subs came in a little bit light. Are there any issues
         there? Or were you a little disappointed with the results? Maybe we
         could have a little color around DIRECTV DSL?

Roxanne Austin: No. In fact Bob, they were right in line with our expectations.
         They came in end of the year at 91,000 subscribers. That was right in
         line with our expectations.

Robert Peck: Okay great. Thanks a lot.

Roxanne Austin: Thanks.

Operator: We will go next to Karim Zia with Deutsche Bank.

Karim Zia: Thanks. Roxanne, I had a couple DIRECTV operating metric
         questions. I know you had mentioned the reasons for the ARPU year over
         year decline, but it seems to be accelerating. Based on what you had
         said before, that NFL penetrations were up, and that is being amortized
         partly in the fourth quarter, as a benefit I guess.


         Is the decline in ARPU that you referred to from pay-per-view and lower
         priced packages from existing subscribers downgrading or is the profile
         of new subscribers changing such that it is dragging down the average?

Roxanne Austin: I think we are seeing lower pay-per-view across the board,
         Karim. And I think that as we, again, as we widen our subscriber base -
         you have got to remember now we have 10.7 million customers. And as we
         are now into the mass of folks out there in the country, you would tend
         to see people taking $40 packages. We can make good money on somebody
         who is going to only spend $40 a month with us.

         So we would expect to see that trend continuing to occur. However, we
         do believe that we are doing some things, through our package
         simplification and others, that will help improve penetration into some
         higher value products. It is increased value for consumers.

         Also, we have the opportunity that we have now with local channels to
         really market that on a bundled basis into our subscriber base will
         help offset that. So we are really looking at the whole ARPU for 2002.
         And we think, given the declining trends that we have seen, offset by
         the opportunities we have in local, that will help mitigate that.

Karim Zia: Thanks. And then a follow-up. On the pre-marketing cash flow
         expectation for the year to be flat, as I recall, with the head count
         reduction you had, 50 million in cost savings, that would appear to
         improve margins by maybe 50-100 basis points. What would be the
         offsetting factor? Is it just rising programming costs?

         And then maybe just a last one, on the interoperable box agreement that
         EchoStar had signed with Thompson, are you going to be shipping those
         boxes too? And what would happen if you are, in the case the merger
         weren't approved? Thanks.


Roxanne Austin: On the pre-marketing cash flow question Karim, it is really
         increases in programming costs and our improvements we're making in
         customer service. We have clearly made the decision to make an
         investment in customer service. And you will see that reflected this

Karim Zia: Thanks.

Operator: We will take our next question from Marc Nabi with Merrill Lynch.

Marc Nabi: Hi. Thanks very much. Just a couple of questions. One, just
         quickly for Kevin McGrath. What percent of the DLA subscribers today
         are from Argentina? And what percent of the net ads came from Argentina
         in the fourth quarter?

Kevin McGrath: Let's see, with slightly under 20% of our total subscribers,
         it is - we closed the year at about 323,000 subscribers out of
         1,610,000. Let me get to the number for the fourth quarter. I am
         certain it was not - it was probably less than 20%. But I may be wrong.
         Give me a second, and I will get that number for you.

Marc Nabi: Okay.

Eddy Hartenstein: This is Eddy. Just to follow-up on Karim's second - the
         second part of his question with respect to what kinds of boxes we
         would be shipping, there has been a lot of discussion as between --
         part of the merger discussion of how we would operate the companies
         going forward.

         Clearly, providing a set top box that can provide both - encode and
         decrypt both Dish Network and DIRECTV signals has been demonstrated
         already. HNS demonstrated that within days after we announced the
         merger last year.


         We have not yet come to any agreement as between us and EchoStar
         exactly how to proceed. It clearly technically can be done. And there
         are certain restrictions that prohibit us from going too far exactly
         yet, prior to merger approval, as to integration of systems.

         To the Thompson agreement, it is simply one to have Thompson be one of
         several existing OEM suppliers to the Dish Network for their set top
         boxes, expected sometime towards mid to end of the year, which would be
         coincident with when we all expect the merger to be approved.

Kevin McGrath: Marc?

Marc Nabi: Yes.

Kevin McGrath: With regard to Argentina, on a net basis, we added about
         14,000 subscribers in the quarter, which represents about 12% of our
         net ads for this quarter.

Marc Nabi: Okay. A question for Roxanne. Roxanne, I am just trying to
         understand the subscriber acquisition costs, which are seeing a trend
         downward this year for the basic set top box.

         Also, explain a little what you think SAC will do with the enhanced
         products, like a TiVo. Like, for example, I just saw a TiVo at Circuit
         City you could buy for $95 for a set top box.

         What is that going to do for those types of products? And what
         percentage of the gross additions are taking those types of enhanced
         products versus basic boxes?

Roxanne Austin: We are looking at about $10 of additional SAC, Marc, related to
         advanced products. And it is a relatively small amount of additions
         that we expect to come from that area.


Marc Nabi: So that - is a basic box considered to have Wink? Or is that an
         enhanced box?

Roxanne Austin: That is not an enhanced box Marc.

Marc Nabi: Good.

Roxanne Austin: The basic SAC includes our classic SAC, if you will. It
         includes Wink. It would only be the Tivo and Ultimate type of products
         that would be included in the advanced set-top boxes.

Marc Nabi: Okay. And just one last question related to price increases. You
         have seen now the cable companies of course annually raise their
         prices. It depends on which operator it is. It could be anywhere from 5
         to 15%, depending on markets. You have seen EchoStar now put a rate
         increase through. And you just recently changed your product, your

         Talk about the policy of what DIRECTV wants to do with respect to price
         increases on a going forward basis.

Roxanne Austin: I think that is a really good question Marc. And let me explain
         our logic and where we are today. We came out of the second half of our
         year really focused on stabilizing our customer base and getting a
         payback for reduced churn.

         So we had a difficult time, as you know, in the first half of the year
         with churn. We had an immediate set of actions that we had to take to
         try to reduce it. We did that. And you can see the benefits with our
         return for the quarter at 1.6%.

         And as you know, we hope to continue to drive churn down even more as
         we go into 2002. That, coupled with the fact that we are migrating our
         entire customer base to our new package simplification program - we are
         going to be repackaging all of our customers and migrating them to new


         packages in the first half of 2002. I think those two factors coupled
         together would, in our view, be difficult to implement a price

         Obviously we continue to see pressure on cost from our programming
         community. And as [costs] continue to increase, it is difficult to hold
         [prices]. We want to be a good value to our customers, yet have a
         reasonable return. But I think our decision to not increase prices at
         this time is appropriate. And I think we will see the benefit on the
         bottom line, translated through reductions in churn.

Marc Nabi: Good. Thanks.

Operator: We will go next to John Stone with Ladenburg Thalmann.

John Stone: Hi. Congratulations on a good quarter. My question is for
         Roxanne and the rest of the DIRECTV crew, related to overlap between
         the satellite broadband DIRECWAY offering and the DIRECTV DSL, into the
         DIRECTV current subscriber base. What sort of overlap is there between
         those communities?

Roxanne Austin: Well, we are actually going to be offering - we offer both
         products to our customer base today. If a customer is qualified on the
         DSL area, obviously we will put them on the DSL program. If they are
         not - in a non-DSL loop qualified area, we will ask them to go on the
         DIRECWAY system. So really, customers have the opportunity for both.

John Stone: But I mean in terms of how - what fraction of the subscribers
         that you are reporting for your satellite broadband and DSL are
         actually already DIRECTV subscribers?

Roxanne Austin: I would say that in the DIRECTV broadband area - that is the
         DSL area - I would say roughly about 20,000 of the 91,000 today are
         DIRECTV customers. And on the DIRECWAY side, off the top of my head --


         Jim, do you know? It is probably a little early, because we are just
         starting to market it into the base.

John Stone: And that really is my follow up question, relating to marketing
         into the base. With broadband penetration in cable in the 6-7% range,
         and your projections for 2002, your guidance for 2002 only being
         another 200,000 to 300,000(2) that would only get you up to perhaps 3%
         penetration of your DIRECTV subscriber base having a HUGHES broadband

         I am wondering why it isn't a larger penetration for broadband and
         video bundled that you are projecting.

Roxanne Austin: Well we will be marketing directly into the base fairly
         aggressively as we go into 2002 on both products. For example, in the
         first quarter we are going to be offered a bundled DIRECTV DSL program
         into the base with a $5.00 discount off the DIRECTV DSL product.

         It is also going to be a very attractive offer I think in that it will
         be lower than - for six months the customer will receive about $10 off
         the typical price, plus the $5.00 discount. And we will be doing
         similar offers with DIRECWAY throughout the year.

         So I think we have the opportunity to see it. Right now, honestly, we
         are not seeing the demand in terms of customers really asking for it.
         We are going to promote it to them so they know that it is there and
         they know that it is available to them if they want it.

Jack Shaw: I might add a little thing to what Roxanne said, which it is kind
         of a little bit concerning cash and making sure, very sure, that any
         offerings we have within HUGHES are squared with what the market is
         going to give us.

(2)  Official Company Guidance is 100,000 to 200,000 net subscriber additions
     for 2002.


         We have been a little aggressive in the past, where we get out a little
         bit ahead of the market. We spend a lot of money and it is not all
         right or wrong. But I think our present philosophy is let's kind of
         throttle ourselves a little bit more and make sure it squares with what
         the market wants.

         And we can certainly turn the heat up real quick. There are a couple of
         companies that want to do it really fast. And we are kind of holding
         them back until we make sure what the demand is.

Jim Lucchese: Roxanne, this is Jim. Right now, about 50% of our DIRECWAY
         consumer are existing DIRECTV subscribers - become DIRECTV subscribers.

Roxanne Austin: Yeah. They are not bundled today. But that is the way - that is

John Stone: Very good. It is good to hear you guys are proceeding out with
         that. And again, thanks for your help.

Roxanne Austin: Thank you.

Operator: We will go next to William Kidd with Lehman Brothers.

William Kidd: Jack, I am not sure whose [area] this falls under. But I am
         curious as to how the various stakeholders are faring since the merger
         has been announced. Specifically, I am interested in how the major
         senior retailers are responding in potentially working with EchoStar,
         as well as your distributors, your installers. And lastly, on that
         question, how are your employees, particularly at the management level,
         holding up? And are there retention issues?

Jack Shaw: Okay. I will speak to the latter, and let's first go to Roxanne
         for the CE.


Roxanne Austin: Well we continue to enjoy, William, as you know, very good
         relationships with our CE retailers. Obviously we are going to continue
         to work together on that. I think you continue to see DIRECTV as a
         brand in the marketplace, and people continue to want to come to retail
         and look for that brand. So I expect that will continue to be very
         healthy through this period.

         Obviously we want to support ultimately their ability to have both
         products in the market - the new product in the market - for the
         combined company. But today, our relationship continues to be strong.
         DIRECTV continues to be the brand. And that appears to be the brand
         that people want to have to be able to offer.

William Kidd: Have they - one of the things that I guess Charlie talks about is
         lower SAC in the retail channel. Have they expressed concern to you
         regarding that specifically?

Roxanne Austin: We are not discussing the merger, per se, with our retail
         partners in that light. As you know, we have to remain competitive
         during this timeframe. So what Charlie offers in terms of the retail
         market, or offers his retailers, we are competing on a basis that we
         think is cost-effective, and continues to lower our SAC for DIRECTV,
         but really aligns the incentives with our retail partners, is what we
         are trying to accomplish. And we have been working, William, in trying
         to achieve that goal I think.

Jack Shaw: William, channels of distribution, pricing, marketing, that kind
         of stuff, you have got to really - we really have to be careful, as
         does EchoStar, that we maintain our separate companies and go our
         separate way. So those kind of things are a lot of speculation on, and
         very little fact right now.

         Concerning employees William, I appreciate you bringing it up. People
         tend to forget employees in something like this. And obviously,
         employees are what make us or break us.


         Obviously the sensitivity is high. The sensitivity of all of our
         managers is high, to make sure that we do what we need to do to
         incentivize people and make sure that they want to stay here, and they
         want to stay with the merged company.

         We have some programs in place to help us do that. And we are not
         losing people, if that kind of is the bottom line of your question. We
         are not losing people. But I think it has to do that we are worried
         about them, and we are thinking about them, and we are talking to them.

William Kidd: With respect to a DIRECTV subscriber customer - maybe this is for
         Roxanne - your guidance range implies that of your full year 2002 net
         ads, that 20 to 25% could come in the first quarter. Last quarter that
         figure was about 25%.

         Is there any concern that we could be heading towards the low end of
         that range, which would imply more in the back half of the year? And I
         am just wondering from your guidance, should we expect a potentially
         much weaker first quarter? And is there something in the market that
         makes you feel that way?

Roxanne Austin: No. If you remember William, we had a significant backlog due
         to problems with our installs at the end of 2000. And so we entered
         2001 first quarter with about 100,000 or so - 110,000 I think backlog
         of subscribers who couldn't get installed. That was an unusual factor.
         We are obviously doing a much better job of installing these days, with
         all the work improvements that we have made.

         So I believe that when you adjust that factor out, we think we are
         going to have a strong first quarter. We have no reason to believe that
         we won't. We have seasonality in our business, which is why we are
         projecting the 20 to 25% in the first quarter. So I think that all


William Kidd: And I guess lastly in terms of Telocity, I know it has been
         talked about a lot on this call already, but in terms of I guess when
         we see an inflexion point in that business that you feel that it is
         tracking well, I am looking at it and I see DIRECTV's goals of trying
         to be cost-efficient in terms of subscriber acquisition.

         And I am wondering is Telocity meeting your expectations now. I think
         it looks a little bit questionable at this point in. And I am assuming
         that you, on a similar basis, may - when do you think it really shows
         its true colors as an ability to support DIRECTV?

Roxanne Austin: Honestly William, I think I will know a little bit better after
         we end this first quarter, doing some of the things we are doing with
         direct marketing into the base. And we are spending a lot of time with
         the DIRECTV DSL team, understanding some of the drivers of the costs in
         the business and other things.

         So working together with them, I think we will have a much better feel
         as we exit this first quarter.

William Kidd: Thank you so much.

Operator: We will go next to Rob Kaimowitz with SG Cowen.

Matt Karnes: This is Matt Karnes in for Rob. Just a couple of quick
         questions. With respect to your cards, are there any plans to swap out
         existing cards? And if so, what would that cost be? What would you
         estimate that to be?

Roxanne Austin: Well obviously we look for opportunities this year to continue
         to drive our piracy efforts further. Certainly a card change is one of
         the things that we are looking at and considering as we go into 2002.


Matt Karnes: Okay. So do you have plans? Or is this something that you are

Eddy Hartenstein: This is Eddy, Matt. We have never really telegraphed
         directly or indirectly what and exactly when we are going to do it. I
         think there is a good deal of speculation out there. We continue to
         look at all of our options.

         We clearly have a plan and the capability of deploying a P4, the next
         generation card. Exactly when we will do that, we will let you know.

Matt Karnes: Okay. If you - assuming that you do go ahead with this, do you
         have any estimate of what it might cost per card?

Roxanne Austin: It is roughly about $10 delivered to the customer.

Matt Karnes: So we are looking at roughly - it could be several millions of
         dollars then?

Roxanne Austin: Oh absolutely. It is very expensive to do that card change.

Matt Karnes: Right. Okay. And also, I didn't quite catch what you are
         expecting in Q1 for subs for DIRECWAY. I know for the year it is 100 to
         200. But I didn't quite catch what you had for Q1.

Jon Rubin: Matt, we don't give quarterly guidance on DIRECWAY or DSL subs.
         It's just the yearly number that we provide guidance for.

Matt Karnes: Okay. Got you. All right. Thanks very much.

Operator: We will take our next question from Ray Schleinkofer with Thomas
         Weisel Partners.


Ray Schleinkofer: Yes. Just a quick question, kind of touching back on the
         PVR roll out. And we have seen ARPU was a little bit lower. And part of
         the reason, you said, was pay-per-view.

         Does that sort of hint that it makes sense maybe to sort of push those
         PVR roll outs and these integrated boxes? And how do you see sort of
         your marketing plans changing on that front, with a lot of the cable
         companies starting to roll out video on demand in a fairly meaningful
         way through the course of `02?

Roxanne Austin: We see some real opportunities with the PVR product and their
         hard drives, to be able to utilize video-on-demand-like capabilities,
         and pushing information down to the box. If the customer decides they
         want to view a series of movies, they can access a broader list, and
         then actually download that information into the set top box.

         The real issue is customers adopting and understanding that technology
         on PVR. It is very difficult in a 30 second spot or a 45 second spot
         even to really explain what that product is. And so there is a little
         bit of education in this product.

         Any customer that has this product absolutely loves it. It is a matter
         of getting into the consumer's hands and having them understand the
         product better. So we see real opportunities there. Yes, we want to
         drive our advanced set top boxes with the PVR capability. It really is
         an education issue in trying to get that out into the marketplace.

Ray Schleinkofer: That is great. Thanks guys.

Roxanne Austin: Thank you.

Operator: Once again, please press star 1 if you would like to ask a question.
         We will go now to Armand Musey with Salomon, Smith Barney.


Armand Musey: Yeah, it is Armand Musey from Salomon, Smith Barney. A couple
         questions. I know you are in the process of renegotiating arrangements
         with retailers to try to move some more of a pay on activation. Can you
         tell us how that is going on?

         And on a related issue, how you see retailer compensation if the merger
         - assuming the merger goes through? Obviously a part of what you are
         paying for is the exclusivity with the large CE stores. And how would
         that change?

Roxanne Austin: Well Armand, we are working very effectively with our retail
         partners to try to align our incentives. I mean, I think they
         understand we are looking for an opportunity. We pay more for a new
         customer activation than we can for helping support cost-effective set
         top boxes in the marketplace.

         We want to have cost-effective second sets and multi-sets for the
         market, because we do want customers - they tend to be higher ARPU
         customers that have multiple sets in their homes. We want to find a way
         to support that. But obviously we can support - we can pay more on a
         primary activation.

         And I think that retailers understand that. They are working with us to
         support that and to do that in a very efficient and - economically
         efficient way for us, and in a way that makes sense for their business.
         And so it really is about working together as a partnership.

         I think our retailers have very high attach rates for their digital set
         top box - their new digital televisions with the DIRECTV product. I met
         with many, many retailers last week in Las Vegas. And clearly, they
         will tell you that the ability for them to drive what they are doing in
         their stores today, which is selling digital televisions, is really
         having the DIRECTV product there is really important to that.


         So I think together, we understand that they have a need for our
         product. We obviously have a need to continue to improve and have a
         cost-effective business model. And I think we are working together
         effectively on most all fronts to accomplish that.

         As I said earlier, I can't speak to what happens merger-wise or with
         the merger with EchoStar. Jack has basically told me he will kill me if
         I even spell merger.

         So my focus is on running DIRECTV every day, and trying to continue to
         improve the business. And what happens with this merger, that is left
         up to others.

Armand Musey: You have been working with the retailers for a couple of
         quarters now. Maybe - how far along are you? Would you say you are
         half-way done with aligning your incentives? Would you say it is?

Roxanne Austin: I would say we are more than half-way done. I think we are
         doing pretty well. We have some work to do in some areas. But I think
         we are doing well.

Armand Musey: Okay. On the broadband front, two questions. Can you tell me how
         large your ongoing commitment to Boeing is on the satellite
         manufacturing front? In other words, how much more in satellites do you
         have to buy from Boeing?

Jim Lucchese: Right now, we are about half-way there with - [we have spent]
         around $900 million through the end of [2001]. And our total commitment
         for the project is around $1-1/2 billion. So we are about half-way
         there with Boeing.


Armand Musey: Okay. One other question. Again, this may be related to the
         merger. I don't know. Tell me if you can't answer it. But you have
         spent a lot of energy talking about your enthusiasm for the broadband
         initiative and so forth.

         It sounds like things are moving along with DIRECWAY and SPACEWAY. One
         of EchoStar's arguments is essentially for the merger that it is very
         difficult to offer satellite broadband at this point. And one of the
         consumer benefits is that essentially by merging the companies that is
         something you would be able to do.

         And yet you are essentially saying satellite broadband is here. How do
         you square that?

Jack Shaw: I think Armand that kind of the best way to approach it is to say
         that from the HUGHES standpoint, we truly believe that broadband is
         here. And we have competitive offerings, if you just go to the
         satellite-based offering that we have, a competitive offering.

         I think that none of us would argue with anything that has been said
         that you can certainly do better if you put the - if you put two
         companies together, you merge them. You have got one infrastructure.
         You can reduce the cost structure and so forth. So I think there is
         truth in the statements that you have heard.

         We believe that satellite-based Internet is a very viable kind of
         thing. We think it certainly becomes much more viable with the merged

Armand Musey: Okay. Thank you very much.

Operator: We will take our next question from Vijay Jayant with Morgan Stanley.


Vijay Jayant: Thanks. My question probably is for Jack and Eddy. But over the
         last couple of months, you have had EchoStar being a little
         confrontational with challenging the NAB and the resolution on Must
         Carry, and having rate increases.

         Do you think [that this is a good strategy]?

Eddy Hartenstein: Vijay, this is Eddy. I think on some of the issues we have
         been right there with EchoStar, certainly with respect to the challenge
         in the courts to Must Carry as to its constitutionality.

         We - even notwithstanding that, we believe, and I think are aligned as
         two separate companies today. And certainly if the merger is approved
         going forward, that carrying most of the channels in more markets would
         be better than having to carry all of them.

         But we also know when to move forward. We are compliant with Must
         Carry. I can't speak - we can't speak directly to challenge that, or a
         contractual relationship that EchoStar might have with any particular
         programmer. And EchoStar has to choose the issues, and operate as an
         independent company, as do we, in this interim.

         There is no secret out there that we want to both provide as many local
         markets and service to local markets as we can, because that is great
         for the business. And putting these two companies together will give us
         some 20 [million] to 25 million [more] households, where we are a total
         and complete replacement for cable.

         And going forward, we are looking at how do you keep costs down. And
         programming costs are certainly the largest expense element for either
         of our companies today, and for that matter, for the cable MSOs. So I
         think it is - the challenge here, just finding the right balance, and
         picking the battles, and moving forward.


Vijay Jayant: Great. Thanks.

Operator: We will take our next question from David Gibson with Macquarie

David Gibson: Yes. Eddy, can you perhaps elaborate a bit further on your
         comment that programming costs, what do you see for the year in terms
         of the pressures? And what we should be factoring into the cost side of

Eddy Hartenstein: Okay. I think the question, before we had that interesting
         byplay, was where do we see our programming costs go, going for this
         year. Mike Palkovic maybe you could answer that.

Mike Palkovic: Sure. Hi David. We see annual increases in programming costs
         similar to cable, and I am sure EchoStar, that go up 5 or 6 or 7
         percent, depending on when contracts have annual renewal dates and
         things like that. That is pretty common in the industry. And I think as
         we - as Roxanne said earlier, in the past we have taken price
         increases. And we will be perfectly able to take them in the future, if
         that is what it takes to mitigate those programming costs.

Eddy Hartenstein: Does that answer your question?

         Operator, are we still connected with that call, that question?

Operator: That line has been closed. We will go to our next question from Rob
         Kaimowitz with SG Cowen.

Matt Karnes: This is Matt Karnes again for Rob. Just a quick follow-up
         question. I just want to check out what your residual payments to
         dealers were for this quarter, and what you expect that to be going
         forward next year.


Mike Palkovic: Yeah Matt, this is Mike Palkovic. Those payments are
         approximately 25 million per quarter. They average approximately $1 per
         customer for any customer that remains active. It is roughly 100
         million a year.

Matt Karnes: Okay. And that is going to be consistent going out?

Mike Palkovic: Yeah. It grows a little bit year to year, obviously as the
         subscriber base grows.

Matt Karnes: Okay. And how sustainable do you think the 1.6% churn level is
         going to be going out into this year?

Roxanne Austin: We actually see opportunities. While I expect that probably in
         the first quarter, because of seasonality, to be somewhat flat with
         this year, I think we see [opportunities] to drive it even lower this
         year. And the reason is because we will have the full year effect of
         annual commitments. And as I said in my opening comments, in the first
         year of a customer's life, and particularly the six or seven months,
         you see some - that tends to be our highest churn.

         And so once we have had a customer for a year or longer, we see
         significant decreases in churn. So I think our opportunity really is in
         2002 to continue to decrease churn as we go into the year.

Matt Karnes: Okay. Okay, good luck with that. Thank you.

Roxanne Austin: Thank you.

Operator: Once again, please press star 1 if you would like to ask a question.
         We will take a follow-up from Marc Nabi with Merrill Lynch.


Marc Nabi: I just want to ask a question on the gross additions. You were
         kind enough to give us the net adds, broken up between the NRTC and
         DIRECTV systems. What was the gross add percentage?

Roxanne Austin: The gross ad percentage, Marc, was 87%.

Marc Nabi: Okay.

Roxanne Austin: For DIRECTV.

Marc Nabi: Okay. And just one other question on competition. I am trying to
         figure out what have you experienced when you have seen a cable system
         light up a digital cable opportunity as well as cable modems? What
         exactly are the dynamics that are experienced through DIRECTV

         Do they leave to go on to someone else to a cable company? Do they stay
         because they like the video programming? Or what are you experiencing?

Roxanne Austin: I am not sure there is a one size fits all there, Marc. But
         obviously digital cable has come out. And in certain markets they have
         been extremely aggressive. Where they have been extremely, extremely
         aggressive, we have seen higher churn.

         Where they have come out in general, as they have done, and advertised
         in a market, they really raised the awareness about digital television
         in the marketplace. We have seen strong customer growth, and an
         increase in the total market. It increases for us. And that churn has
         declined in certain markets.


         Those are big ones, like LA and New York, and Chicago, Miami, Atlanta.
         I can use those as examples. The problem is that when you look at a -
         that is not a one-size-fits-all.

         If you look at certain markets in certain parts of the country, where
         they have come out with very aggressive value programs, they hurt us.
         And it has been - it can be significant.

         So what we have done in response is this year for the first time we
         implemented at the end of 2001 a rapid response marketing team. And
         this is a team that is available on a moment's notice.

         We get word of a rate hike, get word of a digital cable value program.
         We get word of whatever is going on in a particular market. We dispatch
         that team to that market. We are going to do in local market
         advertising, radio spots, whatever it takes - door hangers - to really
         aggressively attack that.

Marc Nabi: Great. Thank you.

Roxanne Austin: Sure.

Operator: Mr. Rubin, we have no further questions. I would like to turn the call
         back over to you for any closing comments.

Jon Rubin: Okay. Well thank you all for joining us today. If you have any
         further questions, please contact me or our investor relations
         department. Thank you for your attention. Have a great afternoon.