With the global economic environment in turmoil, history might not view 2009 as a stellar time to start a new job. But I was so impressed by the enthusiasm, stability, and experience of the Hughes management team that I was delighted to take the helm of Hughes Europe at the beginning of this year. The timing was indeed fortuitous, following right on the heels of a major managed network contract win with U.K. lottery operator, Camelot Group plc. And it has proven to be an exciting and vibrant year in Europe for Hughes. Although most markets have been in recession, countries are nonetheless making major capital investments into new technologies to support broadband. In addition, managed services are growing at a healthy rate and we’re expanding deeper into many countries.
Today, Hughes holds a leading position in the European broadband satellite market, both as a service provider and as a system vendor, with key vertical sectors such as oil and gas, lottery, automotive, telecom operators, and system integrators driving growth. With more than 120,000 broadband terminals shipped cumulatively as of the end of Q3 2009, Hughes Europe continues to be the largest provider of broadband satellite networks and services in Europe, as Hughes is globally. In addition, Hughes Europe now serves a rapidly growing base of broadband subscribers through its network of value-added resellers in Europe, the Middle East, and Africa.
In Europe, the scale of the enterprise market is huge. With a population of 497 million across 27 countries, multiple languages, and 12 currencies, pan-European services must be customized country by country. We see managed services as the key. Rather than directly operating their networks, the trend today is for enterprises to rely on a single provider to manage all network needs, freeing up staff to focus on running the business. For example, we’re providing Camelot in the U.K. with HughesNet® Managed Network Services, an integrated network solution that combines cellular, DSL, and satellite technologies at its 28,000 locations country-wide. Similarly, BP in Europe is employing a HughesNet Managed Network Service that uses the most efficient and cost-effective technology for each site—whether satellite or landline—to connect nearly 5,000 locations throughout the U.K., Germany, Luxembourg, Austria, Switzerland and Spain.
Another important initiative in Europe is the launch in early 2010 of four Ka-band satellites, opening the door to the delivery of consumer broadband service on a significant scale. With an estimated 30 million locations across Europe that currently lack access to broadband, many European countries are mandating and funding “Broadband Everywhere” initiatives. To address this promising market, we’re adapting our highly successful North American consumer broadband services model, now with approximately 490,000 consumer customers in the U.S., to meet European needs. Indeed, in October we secured a multi-year agreement to provide Avanti Communications Group plc and its partner channels with eight gateways and 50,000 customer premises terminals to operate over HYLAS, Europe’s first dedicated, high-throughput Ka-band broadband satellite to be launched in 2010. The initial value of the contract is in excess of $24 million over the multi-year framework agreement, which will enable Hughes Europe to operate in the European consumer broadband market for the first time.
Serving Telcos and Systems Integrators
One of the business challenges in Europe is to penetrate markets and build relationships in 27 different countries. That’s why another key market for Hughes Europe is delivering broadband solutions to large telcos, such as Telecom Italia and Telefonica, and to major systems integrators, such as IBM, Accenture, and Hewlett Packard, which provide services that reach many additional markets.
The Wonders of Telemedicine
In the telemedicine area, Siemens AG in Germany is piloting an innovative program providing mobile mammogram services to rural villages in Germany. Technicians traveling in vans equipped with a Hughes satellite terminal and roof antenna take X-rays and transmit the images via HughesNet to central clinics for diagnosis by experts. Through this initiative, preventive medicine can be provided virtually anywhere, helping in the early detection of breast cancer.
Hughes technology is also helping those travelling on the seas to stay connected. For example, Global Marine Communications provides maritime broadband services powered by Hughes broadband satellite equipment and HughesNet service to vessels in coastal waters of the Mediterranean Sea and the North Sea. This enables those aboard cargo ships, tankers, fishing vessels, cruise ships, and large yachts to access email, browse the Internet, and conduct online business with uniform, high-quality broadband connectivity in what is often a very challenging communications environment.
Helping Communities Rebuild
For the past several years, telecom operators Bentley Walker and Nynex have been using Hughes equipment to provide broadband services to military troops in Iraq, helping them to stay in touch with their loved ones back home. Today, the focus is shifting beyond providing individual access to delivering broadband services for entire communities as they rebuild.
Stronger than Ever
With all these trends, I see a bright, healthy future for Hughes Europe. The economic climate is improving, and the team is well focused on growing the business. We are building a strong sales pipeline, supported by creative marketing campaigns and with a firm commitment to the highest quality of customer care. And I can think of no better way to summarize our confidence than as stated in the words of the forthcoming 2009 Comsys VSAT Report, “The king of VSAT services in Europe continues to be Hughes Europe.”
1 2009 Comsys VSAT Report 11th Edition