By Wesley Brown

Arkansas News Bureau

LITTLE ROCK -- SBC Communications Inc., which has recently been repackaging its grocery list of telecom services, announced Monday that it had struck a deal with EchoStar Communications to offer satellite TV in a 13-state region.

The parent company of SBC Arkansas plans to bundle the TV service in packages with its long-distance, local and wireless phone service as well as high-speed Internet access.

The new alliance, which is expected to kick-off in early 2004, will make SBC the first US phone company to offer video entertainment as part of its bundling packages.

"Consumers have waited a long time for true one-stop shopping, with single-source customer care and billing for TV, wireline, wireless and Internet service, and now it's finally here," Ed Whitacre Jr., SBC chairman and CEO, said in a statement.

As part of the deal, SBC and EchoStar agreed to co-brand the satellite TV service and market it as the SBC Dish Network. SBC also agreed to invest $500 million in EchoStar in the form of convertible debt.

Mike Balhoff, chief telecom analyst for Legg Mason in Baltimore, said SBC is getting into the satellite business in order to compete with rival cable and multimedia companies like Comcast, Cox Cable and AOL Time Warner.

Balhoff pointed out another Baby Bell company, Qwest Communications Co., also entered into a similar deal Monday with EchoStar.

The actions of both SBC and Qwest serve as "an admission that cable operators are a threat to local telephone companies," he said.

Cox, the dominant cable provider in Northwest Arkansas and the Fort Smith area, already bundles video, high-speed Internet services and -- in some markets -- telephone service.

James Anderson, director of public affairs for Cox in Fort Smith, said earlier this month that Internet-based phone service will be introduced in Northwest Arkansas and the Fort Smith area in the very near future.

Balhoff noted that this is not the first time that SBC has tried to get into the TV business.

In April, San Antonio-based SBC ended talks with Hughes Electronics Corp. to buy DirecTV -- EchoStar chief rival -- for $10 billion.

During a conference call with analysts, SBC officials said the deal is similar to an marketing agreement the phone giant has with Yahoo Inc. to sign up new Internet subscribers.

At the same time, SBC has been restructuring all of its offerings to offset declining revenues and prevent long-time customers from jumping to rival phone and cable companies.

Last month, SBC, BellSouth and Cingular Wireless announced a nationwide venture that will allow residential consumers to pool minutes for calls made from wireline and wireless phones.

In April, the nation's second-largest phone company unveiled a new unlimited local and long-distance calling plan for less than $50.00 a month.

Ray Wilkins, SBC's group president of marketing and sales, said told Wall Street analysts during Monday's conference call that the pact with EchoStar was necessary and gives the phone giant an edge over its competitors.

"It was clear that we needed to have a multiple TV programming options," Wilkins said. "Our customers demanded it."

However, SBC investors shareholders gave the deal a lukewarm response on Wall Street. SBC shares ended down more than four percent, or $1.05 at $23.13., in Monday's session.

-- Morning News reporter Ethan Nobles contributed to this article.