Strong Results for a Strong Future
In the last issue of Channels before the year end, our president and CEO, Pradman Kaul, used this column to summarize our 2007 achievements, including the launch of SPACEWAYTM 3, as well as our expectation of strong financial results. Now that those results have been officially reported, I’m delighted to share with you just how strong they really were.
Indeed, the people of Hughes did a tremendous job in 2007. Our revenues were $971 million, an increase of 13 percent over 2006, and our profitability was also very strong with robust growth in all of our market segments. The major contributors were the consumer, international, and mobile satellite markets. Our consumer base grew to 379,900 subscribers in December 2007, a growth of 16 percent over the subscriber base at year end 2006. Our North America and International Enterprise groups provided a solid revenue base, contributing in aggregate over half of the total revenue in 2007. A particularly encouraging statistic is that we were awarded a record $1.1 billion of new orders in 2007, representing a growth of 30 percent over 2006.
Some of our most significant milestones are highlighted below, and I welcome you to read more about them in this issue of Channels.
The First Active “Switch in the Sky”
In December 2007 we accepted the in-orbit handover of our SPACEWAY 3 commercial communications satellite from Boeing, has now started to provide HughesNet broadband satellite services throughout North America.
A New Addition to the Hughes Family
Early in 2008 we finalized an agreement to acquire Helius, a recognized leader in providing enterprise IPTV solutions for applications such as training, corporate communications, and digital signage. This acquisition is an excellent complement to our broadband networking experience and will strengthen our ability to offer comprehensive business IPTV solutions to our enterprise customers.
New Channel Partners
Expanding our sales channels is a continuing objective, and in 2007 we signed agreements with Dow Electronics and CVS Systems, Inc. to distribute HughesNet broadband satellite Internet service in the Southeastern, Midwest, and Great Lakes regions of the United States. We also signed EMBARQ™ as a reseller of HughesNet services to business customers in rural areas of the country.
Key International Contracts
- Our wholly owned European subsidiary signed an amendment to the contract previously executed in August 2007 with U.K. lottery operator Camelot Group plc to provide managed network services for over 27,000 lottery sites in the U.K. The amendment brings the total value of the 10-year contract to over $150 million, making it the largest single order awarded to Hughes in 2007.
- Our Brazilian service subsidiary was selected by Rede Smart, a Martins Group company, to provide HughesNet managed network services to its 930 grocery stores throughout Brazil.
- Hughes India signed a contract with Comat Technologies to supply 10,000 broadband satellite terminals and to provide its nationwide HughesNet satellite service and applications to rural business centers across multiple states in India.
Eight Awards and an Emmy Too
And as if all this were not enough, we’re extremely proud that Hughes was recognized with eight external awards, spanning leadership in markets, technology, employee wellness, and community relations. Perhaps most noteworthy were the technology awards for SPACEWAY and the BGAN 9201 mobile satellite IP terminal, the latter as part of a CNN satellite newsgathering solution awarded an Emmy by the National Academy of Television Arts and Sciences.
In April 2008, Hughes launched commercial service using SPACEWAY 3 in North America, which will provide us with significant cost benefits and also expand the addressable market for HughesNet broadband satellite services. Together with the strong and balanced financial results in 2007, this means Hughes is on solid footing for the future, and I’m confident that the talents of the world-class team that got us here will keep us successful in 2008 and beyond.