BELLSOUTH, GE TO OFFER SATELLITE TV.(BUSINESS)

Byline: Associated Press

ATLANTA -- BellSouth Corp. and a unit of General Electric will team to offer digital television via satellite in the telephone company's nine-state turf.

In the deal announced Tuesday, BellSouth will become the first regional phone company to compete with the satellite services such as the DISH Network and DirecTV.

Within months, the deal will expand BellSouth's potential market for entertainment services from a handful of cities to 14 million households, which will get another choice among wired cable systems and national satellite providers.

The partnership eventually could include 50 million households.

``It sets us up for a major video initiative,'' Bob Frame, president of BellSouth Entertainment, said in an interview today. ``It gives us the capability of offering our customers a full suite of communication services.''

Terms of the deal were not disclosed, but Frame called it ``a significant, long-term agreement'' between Atlanta-based BellSouth and GE Capital, based in Stamford, Conn.

BellSouth hopes to offer customers one-stop shopping -- packages that include entertainment along with local phone service, Internet access, wireless service. Eventually, if it receives regulators' approval, BellSouth hopes to enter the long-distance call market.

The company plans to roll out long-distance service in Georgia and possibly another state by the end of the year.

Ultimately, BellSouth plans to use satellites for more than delivering television programs. The technology is capable -- at least in theory -- of handling e-mail, Internet access, video games and electronic commerce.

But in the partnership with GE, BellSouth will start by delivering the same Americast package of programs that BellSouth currently offers in some areas to about 120,000 people who already receive the service.

BellSouth now has digital television service in 11 metropolitan areas, including metro Atlanta, Orlando and New Orleans.