Hughes Network Systems wrote the book on satellite data and Internet access network services. The pioneering company is a leading provider of broadband satellite network equipment and services to the very small aperture terminal (VSAT) business market. It is also a leading provider of satellite Internet access to consumers in North America serving about 860,000 subscribers with its HughesNet service. Hughes sells communications equipment for mobile satellite-based voice and data network operators and cellular mobile network operators, as well as other users of terrestrial microwave technology. Hughes Network Systems is the primary operating subsidiary of Hughes Communications, which was acquired by EchoStar in 2011.
Hughes provides services with its own satellites, SPACEWAY 3 and EchoStar XVII, and it gets additional satellite capacity from third-parties. The unit has generated the majority of its revenue from its VSAT operations.
The company markets its products and services worldwide (with systems in use in more than 100 countries), but the majority (75%) of its sales have been made in North America. Brazil, the UK, and India have been Hughes’ biggest international markets in terms of sales. It also has operations in China, Germany, Italy, Mexico, Russia, and the United Arab Emirates.
Sales and Marketing
The number of Hughes customers increased to about 860,000 in 2013 from 2012. About 635,000 of them were retail customers, up from 588,000 in 2012. Besides residences and enterprises, Hughes also markets broadband satellite Internet services to government agencies.
Hughes reported revenue of about $1.2 billion in 2013, 5% higher than the $1.15 billion posted in 2012. This increase came from higher service and hardware revenue from DISH Network, the result of an increase in sales of broadband equipment and services agreement Hughes and dishNET reached in 2012. Hughes also had higher service revenue related to an increase in broadband services sales. The unit had lower sales of mobile satellite systems equipment and international broadband equipment.
Hughes is expanding in the sky and on the ground. It began offering HughesNet Voice, an integrated VoIP service, that allows Hughes to compete with TV, phone and Internet – triple play – deals offered by other companies. In October 2012, the unit introduced HughesNet Gen4 broadband Internet services North American customers. The services are delivered via EchoStar XVII, which was launched in July 2012. Hughes has a distribution agreement for the services with dishNET Satellite Broadband in which dishNET has the right, but not the obligation, to market, sell and distribute the services.
The company is moving aggressively in India, signing deals to provide services that connect ATM networks. In 2014, it won contracts from eight banks to connect more than 12,000 off-site ATMs and rural banks branches with a secure boardband satellite network. The banks are Punjab National Bank, HDFC Bank, Oriental Bank of Commerce, Bank of Baroda, IDBI Bank, Dena Bank, Punjab & Sind Bank, and Odissa Gramya Bank. Hughes also provides connections for white label ATMs in India.There are 500 operational VSAT deployments of white label ATMs in the Indian states of Maharashtra, Karnataka, Tamil Nadu, and Uttar Pradesh.
Mergers and Acquisitions
In December 2013, Hughes acquired Solaris Mobile, a company based in Ireland, to provide mobile satellite services and complementary ground component services covering the European Union. Hughes intends to commercialize this license through its satellite and terrestrial technology capabilities.
EchoStar's interest in Hughes Communications stemmed from the company's efforts to diversify its business (which is overwhelmingly drven by sales of digital television set-top boxes to former parent DISH Network), while extending its ability to offer satellite services. Hughes' overseas operations also gave EchoStar, which makes the vast majority of its sales in the US, a broader international footprint.