Hughes Network Systems and SkyTerra: Moving in Exciting New Directions

On November 10, 2005, the New York-based private equity firm, SkyTerra Comm. Inc., announced that it had executed an agreement to acquire the remaining 50 percent of Hughes Network Systems, LLC from The DIRECTV Group, Inc.

SkyTerra an affiliate of Apollo Management, L.P., is a major player in the satellite and telecommunications space. With the transaction expected to close in early first quarter 2006, Channels Newsletter recently asked Pradman Kaul to share his thoughts about the acquisition.

How does Hughes fit into the SkyTerra Organization?
Hughes has developed an excellent working relationship with SkyTerra and is well aligned with SkyTerra’s and Apollo Group’s investments in the satellite sector, such as in Mobile Satellite Ventures, Sirius Radio, and Intelsat. In addition to these synergies, SkyTerra brings valuable credibility from the financial community, which will help support our growth as the market leader in broadband satellite communications. SkyTerra will provide the financial strength, corporate support, and strategic direction that will enable our operating units to focus on and exploit the opportunities within their lines of business.

Will the new ownership change the direction of Hughes’ products and services?
Over the past several months, we have announced a comprehensive range of advanced new products and services that make satellite broadband faster and more flexible. We launched the DW7000 platform of broadband satellite routers and standardized enterprise service plans. In addition, we introduced Hughes managed network services to the marketplace. We have also expanded our portfolio of applications in areas such as Internet and intranet access, VPNs, multi-media distribution, digital signage, and VoIP—unlocking the value of broadband across all sectors: large enterprises, small/medium businesses, government, and consumers. The new ownership will enable us to continue to develop innovative new products and services and to grow our mobile satellite and broadband point-to-multipoint system businesses internationally.

How does SPACEWAY figure in Hughes’ future?
SPACEWAY technology, know-how and expertise—all developed at Hughes—will continue to be a big part of Hughes’ future moving forward. Hughes expects to launch the next-generation SPACEWAY 3 satellite for broadband services to serve its North American market segments in 2007.

Do you have a special message for Hughes customers and other stakeholders?
Hughes will continue its core commitment of partnering with customers to understand critical business needs in order to develop the most effective communications solutions. I also wish to express my sincere thanks for your continued loyalty in doing business with Hughes. This is an exciting time for us and we are confident that with SkyTerra as our parent company, we will further enhance our winning record in serving you, our customers, and bring a bright and rewarding future to our dedicated employees, resellers, and shareholders.