Hughes Communications aims even higher than visionary company namesake Howard Hughes did. Through operating subsidiary Hughes Network Systems, the company provides broadband satellite equipment and services, based largely on very small aperture terminal (VSAT) technology. Over a network of owned and leased satellites, it provides consumers, businesses, and government agencies worldwide with broadband Internet access via the HughesNet service. The network also enables voice calling, video transmission, and data services such as credit authorization. Hughes also sells network hardware systems used by fixed and mobile communication systems operators. EchoStar bought the company for almost $2 billion in 2011.
EchoStar's interest in Hughes grew out of its effort to diversify its business and customer base, by beefing up its ability to offer commercial satellite services and expanding its international reach.
Hughes went public in a $100 million initial public offering in 2005; its sales topped the $1 billion mark by 2008. The company suffered a net loss in 2009 after losing a $44.4 million deposit to Sea Launch Company, LLC. Sea Launch was ordered to pay back the deposit for failing to launch Hughes' SPACEWAY 3 satellite, but the company filed for Chapter 11 bankruptcy.
A settlement was reached in mid-2010 whereby Sea Launch issued two $22.2 million vouchers to Hughes Communications for a future launch contracted before the end of 2015. However, the next satellite Hughes plans to launch, called Jupiter, is already contracted to be launched by Arianespace. Jupiter is being constructed by Space Systems/Loral and is scheduled to launch in 2012. It will have 10 times the capacity of the SPACEWAY 3, launched in 2007.
While higher selling, general, and administrative expenses, as well as further impairment losses from deposit paid to Sea Launch, hurt the company's fiscal performance in 2010, Hughes Communications moved back into the black that year due to sales growth in its consumer segment
The company's VSAT broadband operations account for about 90% of its revenues. Hughes provides its products and services worldwide, but only about one quarter of sales (mostly in the VSAT segment) are generated outside of North America. Brazil, the UK, and the India (where it is investing in the expansion of its infrastructure to meet growing demand) are the company's biggest international markets in terms of sales. It also has operations in China, Germany, Italy, Mexico, Russia, and the UAE. Hughes' growth strategy for the VSAT segment includes focusing on the consumer market domestically and network service providers internationally.
The company's Mobile Satellite Systems Group provides mobile systems operators with satellite ground segment systems. The Telematics Group, working with former subsidiary HUGHES Telematics, designs automotive telematics systems that help vehicle fleet operators and other businesses track their assets on the road. The Terrestrial Microwave Group provides equipment that mobile operators use to connect cellular sites, and fixed operators use to provide wireless broadband service.
Formerly known as SkyTerra Holdings, Hughes Communications was spun off from parent company SkyTerra Communications (renamed LightSquared) at the end of 2005. SkyTerra bought the company from DIRECTV (formerly known as Hughes Electronics). Both Hughes Communications and DIRECTV trace their roots to companies owned by reclusive 20th century industrialist Howard Hughes.