|2007 in Review: From NASDAQ to SPACEWAY
It was a blustery day in New York’s Times Square, but January 18, 2007 brought the Hughes team a rare, warming experience—ringing the closing bell of the NASDAQ Stock Market. This event not only celebrated our company’s listing on the NASDAQ last year; it also served as a symbol of all we have accomplished and where we are headed.
So how have we done? Since January, Hughes stock has increased nearly 35 percent, the company is poised to pass the $1 billion revenue milestone, and we’ve had positive results for seven consecutive financial quarters. By any financial measure—cash, profitability, revenue, growth— Hughes has met or exceeded all expectations.
These kinds of results don’t happen by accident. We have an incredible team executing a proven business strategy—which is to leverage our rapidly growing broadband service business from a continuing strong base of technology and product innovations. And we’re not averse to selectively pursuing opportunities at the edges of our core business that can help us grow faster, such as the mobile satellite development projects we won this year from ICO, MSV and TerreStar Networks. Everyone on the team is also working hard at maintaining effective cost controls that enable us to compete in a tough market, while making the margins we need for solid profitability.
Out of This World
Certainly the crowning achievement of 2007 was the successful launch of SPACEWAY 3 in August from Kourou, French Guiana. SPACEWAY, the world’s first satellite to employ onboard switching and routing, is now in its orbital position, and after payload and functionality testing, we expect to put it into commercial service offering HughesNet broadband services in North America during the first quarter of 2008.
It’s a significant turning point for the entire Hughes community— shareholders, customers, and employees alike—because for the first time we will operate our own satellite. From a personal point of view, it was a crusade: we had to bring this technology to market. So much was riding on it—our reputations, our aspirations, and not least the nearly $2 billion invested since 1998 to develop it. Admittedly, there were some temporary setbacks when Hughes went through changes in ownership. But all the anxieties disappeared in the roar of the rocket as SPACEWAY blasted off— it was an exhilarating experience.
From Connectivity to Services
So how will we move forward? It’s my firm belief that we can shape the future of new broadband services and thereby expand our addressable market. Connectivity alone is becoming a commodity and the future lies in offering people and organizations services and applications they don’t have today. We will seek out those new applications, expand our traditional markets, and probe new opportunities. Telematics, for example, is a business we were not in two years ago. When the opportunity arose to enter that market, we jumped in and have conducted significant technology and engineering work. Other examples we can build on are several major managed services contracts we won this year, which include multi-casting of digital video to point-of-sale locations, a key element of many new applications.
Closing the Digital Divide
Broadband is growing so fast globally that we sometimes forget about the billions of people in both developed and developing nations who can’t get it. We’re already working on several exciting initiatives to provide satellite broadband connectivity to underserved areas around the world, including regions in India, Brazil, China, Russia, and the United States. In India, for example, we launched a novel initiative to implement Internet kiosks, providing HughesNet e-services in rural towns and villages.
A key application in closing the digital divide is e-learning, which brings courses via broadband from institutions and professors to areas that would not otherwise have access to such resources. Telemedicine is also an important satellite broadband-based initiative that gives people in rural areas access to the kind of medical expertise that is available only in urban areas. And satellite broadband also enables e-governance services so that people in remote areas can, for example, get a birth certificate, apply for a driver’s license, or pay taxes online.
The Formula for Success
I see a very bright future for Hughes. Our continuing challenge going forward will be to maintain our focus and leadership in our core business, while still probing opportunities on the edges and always seeking to create new markets. We reached some significant milestones this year and should never forget what brought us here—a remarkable group of competent people who work hard, who like what they do, who like each other, and who believe in each other. That is the formula for success, and I remember that every day.