Executive Corner

Q: Hughes had a great year in 2014. What were some of the company’s major accomplishments?

A: With growing revenues and healthy margins in our businesses all over the world, Hughes had an exceptional year in 2014. Of particular note, we crossed the 1 million mark of active users for HughesNet® high-speed satellite Internet service in North America, making it the world’s largest consumer satellite service—all of which is powered by our award-winning JUPITER™ System. In the enterprise space, our HughesON™ Managed Network Solutions portfolio has been well received with some major wins and expansions, including Delhaize (Food Lion), Springleaf Financial, and GTECH, the U.S.’s largest lottery provider, which extended its service agreement through September 2022, including space segment, hub operations, and maintenance for over 100,000 sites. Within our franchise-oriented markets, Hughes expanded numerous contracts, one of the largest being with Yum! brands (KFC, Taco Bell, Pizza Hut). We also successfully introduced the HR4400 Branch Gateway, a single cost-effective device that combines strong security, routing, and Hughes unique Active Technologies for multibranch organizations—a big driver for enterprise managed services globally.

Q: In terms of our successes internationally, which new accounts or account expansions stand out?

A: Hughes service companies in Brazil, India, and Europe, all had equally great years. The Hughes Brazilian subsidiary signed a contract extension with Telemar for the provision of broadband services for approximately 3,200 sites, while the Indian subsidiary continued to expand its rural bank and ATM network in India. There are more than 50,000 sites now in service, part of a major project that connects rural locations to the national banking network. Prior to this network, residents had to travel to the nearest city with a branch bank to conduct transactions. Hughes India now has over 100,000 VSAT sites in operation. Hughes Europe was selected by Smiggle for a comprehensive HughesON Managed Network Solution that includes wireless backup to support the Australian retailer’s UK Launch. In the Middle East, we won a $69 million contract for a global foreign ministry satellite network spanning six continents and 100 countries. And in Colombia, Hughes was selected by both Hispasat and Anditel to provide high-speed Internet services to rural schools and communities under the Vive Digital program.

Q: How did Hughes do in the aeronautical sector in 2014?

A: We have continued to make great inroads with airborne broadband solutions through our partnership with Global Eagle Entertainment (formerly Row 44). Hughes provides the onboard routers that underpin their inflight systems, together with satellite hub connectivity and leased space segment. Beyond the U.S., Europe, and Russia, in 2014 Hughes aeronautical business expanded into the Asia Pacific region with Thaicom, a leading satellite communications provider, supporting services to airlines in Thailand and Southeast Asia.

Q: Can you share an update on JUPITER™, in terms of our strategy or progress against goals?

A: Building on its success as the cornerstone of HughesNet service in North America, our JUPITER System in 2014 become the high-throughput satellite (HTS) platform of choice by leading providers globally, whether the operation is over Ka-, Ku- or C-band satellites. That means the ground system control and management infrastructure as well as customer terminals are based on the same core technology building blocks, powered by our System-on-a-Chip (SoC) technology. This offers customers tremendous advantages and efficiencies and opens the door to delivering the widest range of enterprise and consumer applications. (See related story in this issue of Channels).

Q: Which of the milestones in the Mobile Satellite arena are particularly noteworthy?

A: Recently, our parent company EchoStar announced a name change for its wholly-owned subsidiary, changing Solaris Mobile to EchoStar Mobile. Echo- Star Mobile is the pan-European S-band licensee for mobile satellite services with complementary ground components, and they are moving forward with Hughes to design and develop a satellite-based platform utilizing the ETSI GMR-1 3G air interface standard. This platform enables wireless mobile devices to communicate over the satellite portion of EchoStar Mobile’s network, supporting 3G/4G compatible user services, including multimedia and voice.

Q:After such a banner year in 2014, what is the outlook for 2015 and beyond?

A: Looking ahead, Hughes is on track for the 2016 launch of our next-generation high-throughput satellite, EchoStar® XIX. With over 150 Gbps throughput, this new Ka-band satellite will have 50 percent greater capacity than EchoStar® XVII. Building on its success, the new satellite system is designed with an advanced architecture having more than 120 spot beams, to further expand high-quality HughesNet Gen4 Internet services across the U.S. and major parts of Canada and Central America. In fact, Xplornet Communications, Canada’s largest rural broadband provider, has committed to a lifetime lease for all of the Canadian satellite broadband capacity on EchoStar XIX, including the gateways necessary to support the service. All in all, 2014 validated why I am very bullish about the healthy growth of all our business segments, as our continuing investments in both new technology and services yield ever higher speeds, lower cost per bit and more applications and benefits for our customers. Our leadership in both technology and service delivery sets Hughes apart and is the key to our success.