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President of Hughes
In this issue, we explore how Hughes continued strong performance consolidates its leadership position and global market share.
Q. Hughes had a great year in 2018. What were some of the company’s major accomplishments?
A. It was a great year on several fronts reflected by continued positive growth in both revenue and net earnings, which were up 16% and 27% respectively over 2017. Major accomplishments include that we ended the year with more than 1.3 million HughesNet® subscribers, representing 69% market leadership in the U.S. and cementing our position as the largest satellite Internet service provider in the world. In the latest FCC’s Measuring Broadband America report, HughesNet was ranked number one among all ISPs in meeting or exceeding advertised download speeds for the fourth consecutive year.
On the enterprise side, we continued our successful expansion of HughesON™ Managed Network Services globally, enabling optimized network and application performance across multiple locations—with now more than 425,000 points of presence including satellite and terrestrial across a wide range of industries and government organizations. More than 30,000 of these are HughesON Managed SD-WAN sites, making us a leader in this large and important category of enterprise solutions. Overall we continue to be the number one global VSAT provider with approximately 50% market share powering satellite systems around the world.
Q. Service expansion across the Americas made news, not to mention the Yahsat JV service in Africa/Middle East. What is the formula for success?
A. The successful launch of the Hughes 63 West hosted payload in July set the stage for us to add substantial capacity and expand HughesNet consumer service in South America. The new payload helps us build on the existing service in Brazil where we have operated in primarily the enterprise and government sectors for over a decade, and expand by reaching 90% of people in Colombia, Chile, Ecuador and Peru. On the other side of the globe, we commenced a joint venture with Yahsat to provide satellite services across Africa and the Middle East. The newly formed company is now operational and bringing services to market.
Our formula for success is to leverage the infrastructure, knowledge, and experience from our service business operations in North America and adapt it as necessary to each new region or country, but utilizing proven processes and practices as a solid foundation for smart deployment. An equally important element is finding and working with suitable partners that bring local market know-how and distribution capabilities to the table. As in the case of our JV with Yahsat, we are strengthening a position in the existing market to bring new services to Africa and the Middle East. Q. Can you speak to the ways in which the JUPITER™ platform is enabling growth across all market segments, from consumer to government, mobility and enterprises?
A. A key to our business strategy is to maximize deployment globally of a single technologically proven and flexible broadband platform, namely our JUPITER System. No matter if we own and operate the service or supply it to power those of a provider customer, the same core JUPITER platform with appropriate versions is used for all market segments—consumer, enterprise and government. The advantages are that as we continue to innovate, enhancements for one segment become available to the benefit of others, and total volumes of scale drive manufacturing costs down for all. For example, our aeronautical mobility terminal is based on common JUPITER technology that enables both residential and enterprise applications. From a technology perspective, JUPITER innovations encompass key worldwide standards for satellite broadband service, including wideband DVB-S2X, yielding very high overall efficiency, fast packet processing and data throughput. It should be noted that some of our competitors talk about having this advanced type of system in the near future. We have it today!
Q. Hughes has effectively penetrated the emerging market of community Wi-Fi. Where is this application helping to bridge the digital divide?
A. Community Wi-Fi is an approach to providing public Internet access over a Wi-Fi Hotspot, powered by satellite backhaul, where anyone can get connected using any Wi-Fi enabled device. These hotspots can be implemented in different ways to meet operator, government or community needs. For example, we recently launched a partnership with Facebook to provide HughesNet Wi-Fi Hotspots in villages and towns across Brazil and Mexico, whereby a local merchant can sell Internet access on their premises to the public at an affordable, per-use price. Governments, sometimes in partnership with local telecom companies, are bridging the digital divide by delivering Community Wi-Fi at government sponsored locations (e.g., schools, libraries, health centers, community centers), offering it to the public for free or at reduced cost.
To date, Hughes and our partners have deployed over 32,000 VSAT-enabled hotspots in Brazil, Mexico, Russia, and Indonesia, and we’re looking beyond our current operations in the U.S., India, Brazil, South America and Europe to grow this emerging addressable market. It’s a win-win opportunity, as existing cellular and Wi-Fi providers can justify expanding their footprints in areas where terrestrial backhaul whether using fiber or cable is prohibitively expensive.
Q. Hughes Aero IFC business is also making great strides. Can you talk about key milestones, as well as the importance of our partners?
A. We continue to make good progress in the Aero IFC business. Our Global Eagle partner now has over 1,100 aircraft outfitted with the Hughes Aero Solution, which includes onboard satellite terminals and connectivity. In the fourth quarter, SES ordered additional gateways and some of our JUPITER capacity over Mexico to initiate service for routes over Mexico and the North Atlantic, expanding the Thales In-Flight footprint. With these and prior expansions, the range of our JUPITER aeronautical platform has now increased significantly and covers routes from Mexico to Canada, the North Atlantic, Europe, and Russia. Based on its success, we expect both coverage and the number of JUPITER equipped aircraft deployments will continue to grow in the years to come.
Q. Before we close, can you talk a bit about what’s ahead for Hughes?
A. Satellite technology is evolving at an amazing rate with new services and apps launching daily. Indeed let’s not forget that we’ve gone beyond geostationary satellites on which we’ve primarily built our success—including SPACEWAY, JUPITER 1/EchoStar XVII, JUPITER 2/ EchoStar XIX, and in 2 years JUPITER 3 Ultra-High Density satellite—and have completed development and shipped the first gateways to support OneWeb’s Low Earth Orbit (LEO) satellite constellation, a very complex and challenging engineering program.
It’s clear that connectivity demand worldwide is continuing unabated, and that hybrid solutions of satellite and terrestrial networks will satisfy this need universally in the most cost-efficient way. Hughes stands well-positioned as a leader in both technology and service delivery, with significant coverage through our own operations and combined with our service partners spans over 100 countries on 6 continents. And we’re in that enviable position because of our people and their ongoing drive to innovate. It’s because of them and the rapidly growing global market we work in that I am confident of our continued leadership and business success.
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