Not anymore.

For the first time since it was introduced nearly a decade ago, satellite TV has become a serious player in Hawai'i. With a recently expanded all-digital channel lineup, addition of local channels and free installation and equipment, they've been siphon-

ing off customers from Oceanic Time Warner Cable, the state's lone cable TV company.

DISH Network, owned by Colorado-based EchoStar Communications, and DirecTV Group of El Segundo, Calif., declined to specify how many subscribers they have in Hawai'i for competitive reasons. However, a look at the brisk number of new installations shows a strong upswing in satellite demand.

"We're just being inundated with customers calling," said Tim Batchler, operations manager of Microcom in Pearl Harbor, a retailer and the main installer for DISH Network in Hawai'i. "We're at a point now where we have so many sales, we can't keep up."

During the past eight months, sales have more than tripled, he said. The wait to get satellite TV installed is now about two weeks, but has been as long as six weeks in recent months, Batchler said. These days, Microcom is doing about 150 installations a week compared with 50 to 80 last year.

As for DirecTV, installation is backed up by three weeks, said Jason Gardner, president of Satellite Guy Inc., an installer and retailer in Hawai'i Kai. "Demand has just increased," he said.

Alan Pollock, Oceanic's vice president of marketing, acknowledged that some cable customers have switched to satellite, but he said many were dissatisfied and came back.

"We do lose some customers to DISH, but we get back 50 percent of them," he said.

Good potential

Hawai'i represents a potentially lucrative market for satellite TV providers.

Among the 50 states, it ranks the lowest for satellite TV penetration, with just 15,000 subscribers as of early 2004, according to Leichtman Research Group, a New Hampshire research firm. As for cable TV, Hawai'i is seventh in the nation. In 2003, the state had about 383,000 subscribers.

"Hawai'i is a very important market for DISH Network," said Marc Lumpkin, a spokesman for the satellite TV provider.

The growing popularity of satellite TV in Hawai'i reflects a national trend.

From 2002 to mid-2003, satellite TV added 3.2 million net new subscribers across the country while the top 10 cable TV providers lost a net 800,000 subscribers, according to Leichtman Research.

With 75 percent of the multichannel viewing market, cable still dominates. But market share is down from 95 percent. Satellite TV — known as direct broadcast satellite in the industry or DBS — is growing fast. Reduced prices and free equipment from satellite providers are enticements to switch, as are cable rate hikes because of infrastructure investments and higher programming and labor costs.

At $47.90 for its standard monthly digital service, Oceanic's base charge is higher than that of DISH Network and DirecTV at $39.99 per month to connect one television. From there the cost of the services can vary when additional charges kick in, such as connecting additional rooms, subscribing to premium channels, installation and equipment charges, termination fees, and repair charges.

Oceanic's much larger subscriber base reflects the fact that cable TV has been around for a lot longer and has traditionally offered more channels, including local channels.

That is changing. DISH Network has expanded its menu to include more than 230 channels, including the addition of local channels in 2002. That gives it a slight edge over Oceanic in the number of video and audio channels offered.

In April, DirecTV expanded its lineup more than 145, largely reflecting what it offers on the Mainland. When the satellite TV provider entered the Hawai'i market in 2000, it offered 44 standard channels. DirecTV, however, still does not offer local channels.

Starting in 2005, DirecTV plans to expand its slate of high definition television channels with the launch of two satellites. Two more satellites are expected to go up in 2007. The four should give DirecTV the capacity to carry an additional 1,000 local high-definition channels and 150 national channels.

In December, DISH whittled down its satellite dish for Hawai'i to 24 inches from 36 inches because of improved technology, Gardner said. But it's still larger than what Mainland viewers use. While both DISH and DirecTV's satellites hover above the equator, their signals are aimed at North America. Hawai'i consumers have to use a larger dish to get a clear signal.

So which is better, cable or satellite? It all depends on what features you want.

Both technologies offer many of the same options — digital channels, high definition television, pay-per-view, interactive TV where you can pay bills online and digital video recorders, a Tivo-like service where you can pause and record live TV.

But there are some differences that could tilt you toward one or the other.

With Oceanic, you can get high-speed Internet through Road Runner bundled with your cable TV service on one bill. DISH Network offers high-speed DSL service through Earthlink — so you get two bills and you need a landline — while DirecTV doesn't offer Internet at all in Hawai'i.

Unlike satellite, cable also has the capability to offer phone service. Oceanic plans to offer local and long distance calling next year.

Installation is trickier with satellite TV. If you live in a condominium, getting a satellite dish installed can be a problem depending on your homeowner association's rules. A Federal Com-

munications Commission ruling lets a homeowner install a satellite dish and other telecom devices in an area owned by the resident, such as a lanai. But to attach the dish to the condo building or other common areas, permission is needed from the homeowner association.

In Hawai'i, clarification of Act 72 this year gave the boards of homeowner associations the power to approve or disapprove installation of telecom devices such as satellite dishes in the building or complex. Previously, boards needed approval by 75 percent of homeowners, the state said.

Unlike cable, satellite TV subscribers also need to have an unobstructed view to the east for satellite signals, providers said. DISH Network tilts the dish by 41 degrees while DirecTV goes to 20 degrees. The installer also has to go to a customer's house to see if satellite reception is possible. About 8 percent of O'ahu's homes cannot receive satellite TV, Batchler estimated.

However, one shortcoming of cable is that it's not all the channels are digital, said Raymond Panko, professor of information technology management at the University of Hawai'i at Manoa. Satellite TV is 100 percent digital.

Also, the same money usually gets you more channels with satellite TV, said Allan Keiter, president of MyRatePlan.com, an Atlanta-based consumer Web site that lets users compare rate plans for free.

If you order services a la carte at Oceanic, the total is "slightly more" than satellite, Pollock said. But he said that half of Oceanic's customers have purchased bundled services, which saves them money.

Product bundling is one way cable providers can stem the movement to satellite TV, according to J.D. Power and Associates, a Los Angeles-based market research and consulting firm.

Satellite TV also provides some channels unavailable through cable, such as DirecTV's NFL Sunday Ticket, which is a broadcast of all NFL Sunday events. DISH Network offers an extended lineup of regional sports from around the country.

But as cable and satellite TV providers scramble to offer the largest array of channels, the average U.S. household only watches 17 channels, according to the Consumer Federation of America in Washington, D.C.

As for signal interruptions, heavy rains could affect satellite while cable TV also experiences outages, Keiter said.

In customer satisfaction, satellite TV edges out cable. According to a study released last month by J.D. Power, satellite received a score of 723 out of 1,000 compared with 659 for digital cable. DISH Network came out on top among satellite TV providers, followed by DirecTV.

However, cable's score has improved at a faster rate than satellite, the 2004 study said.

But if the experience of Charles Padua of Kalihi and Mary Takamure of Kapolei are any indication, both still need improvement.

Padua had been an Oceanic subscriber for nearly 20 years when he decided to switch to AlphaStar, a satellite TV company that came to Hawai'i in 1996 but filed bankruptcy a year later. When Padua tried to sign up again with Oceanic, he was surprised to find out that the new customer promotions were at least 30 percent cheaper than what he got as a loyal customer.

So the financial adviser switched to DISH Network and hasn't looked back.

"I'm really happy. Everything's been rock solid," Padua said. "I hope I never have to go back to cable."

Just the opposite

Mary Takamure had the opposite experience. She went back to cable TV after signing up with DISH Network a few months ago. She returned to Oceanic after noticing that some of her family's favorite channels weren't available and that rain affected the quality of the pictures.

"It rained the night they installed it and the reception was bad," the business owner said.

When she tried to cancel her service three days later, she was charged a $200 termination fee. Calls to the national toll-free number for customer service weren't much help. She was told DISH Network doesn't have control over its independent service providers.

"I had no choice but to pay it," Takamure said. "Satellite all the way around was a very bad experience."