Executive Corner

Today, we’re seeing a tidal wave of broadband adoption across North America. Virtually every human activity is being affected by broadband, and the need for bandwidth continues to grow at a healthy clip in all of our markets—enterprise, government, consumer, and small business.

Today’s Complex Enterprise Network

Many enterprises today are building diverse networks, which makes the Hughes hybrid network concept—the ability to have two diverse technologies at every location—very popular. At the same time, no matter how much bandwidth enterprises procure, it is quickly consumed by new applications and requirements. To meet this burgeoning need, we’ve developed a branch server concept for distributed enterprises. This managed service not only supplies enterprise-wide network management, but also includes value-added services for branch locations such as optimizing Web access, accelerating protocols and applications, and overlaying a blanket of security to ensure safety of the network at these locations.

To meet critical enterprise security requirements, Hughes networks comply with Payment Card Industry Data Security Standards (PCI DSS). We also help our enterprise customers achieve security certification, including meeting the recent PCI DSS requirement to scan for rogue wireless devices. Many customers are also adopting Hughes security services, including firewall devices with filtering that is updated regularly with the latest threats to halt attackers even as they come up with new schemes.

In addition to our key enterprise markets such as lottery, oil and gas, retail, and hospitality, we’ve also invested resources in the utility and transportation markets, including technology to provide broadband on airplanes and trains.

The Public Sector

The government market continues to offer significant opportunity. Hughes holds major government contracts, including the GSA Schedule, SATCOM II, and Networx, and our business with the U.S. federal government, including the Government Education and Training Network (GETN) and the Social Security Administration network, continues to grow.

One of our recent exciting innovations is the Hughes Inter-Governmental Crisis Network (IGCN), a private “network of networks” that is instantly deployable and interoperable among multiple agencies and levels of government. With secure, alternate path communications, IGCN enables maximum preparedness and rapid response to any emergency, and we expect more and more agencies to adopt this powerful concept.

Hughes has also been awarded a number of contracts with state governments, including recent contracts with Texas, Oregon, and Colorado. Virtually every state has regions that cannot adequately be served with terrestrial telecommunications, creating an important opportunity to provide high-speed Internet access as well as backup services in case of emergency.

In addition, we’re seeing a wave of broadband applications in the defense sector, particularly in the airborne, maritime, and land mobile arenas, where there is a strong fit for our technology.

Consumer and Small Business Markets

The tremendous bandwidth, onboard switching, and spot beam technology of our SPACEWAY® 3 satellite has enabled us to offer consumers and small businesses the fastest service plans ever, providing downloads starting at up to 1 Mbps and going as high as 5 Mbps. With 15,000 new HughesNet® subscriptions per month, we crossed the 500,000 subscriber milestone earlier this year, and we’re seeing very low churn rates, which we believe is attributable to speed, performance, and our focus on customer satisfaction.

A Head Start on Tomorrow

The advancement of satellite technology and the ground systems that support it continues to drive significant market opportunity. Consider that on the first broadband networks in the mid-90s, we used satellites with about 700 Mbps of capacity. Fast forward to 2007 when we launched SPACEWAY 3 with 10 Gbps of capacity. And today, looking forward to the 2012 launch of our new satellite Jupiter™, we expect to exceed 100 Gbps. The unique mix of our legacy capacity, the SPACEWAY 3 capacity that allows terminals to connect to each other in a single hop, and Jupiter’s enormous capacity will allow us to provide a truly robust platform for the future.

One of the advantages Hughes brings to the marketplace is the scale, technology, and resources of a large service provider combined with the agility and flexibility of a mid-sized player. As we push hard on our technology, we also remain focused on the services we’re providing our customers—a strategy that has helped us transition from a technology business to a service business over the past 10 years. With our branch server concept, for example, we can provide services unequaled by any other provider, and I believe our future will center around our ability to harvest technologies in the services space.

The tidal wave of broadband requirements and growth will likely continue to expand throughout this decade and into the next. Communications requirements by individuals, businesses, and governments seem to be insatiable, and our unique ability to reach every pocket of North America with quality service positions us for strong growth well into the future.