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Hughes Network Systems, LLC
11717 Exploration Lane
Germantown, MD 20876 USA
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Rafael Guimaraes, President of Hughes Brazil
In this issue, we speak with Rafael Guimaraes, President of Hughes Brazil, about the strategies, opportunities, and challenges associated with the launch of HughesNet service in Brazil.
Q. Congratulations on the recent launch of HughesNet in Brazil. Can you describe this new market opportunity for Hughes?
A. The opportunity is to provide HughesNet high-speed satellite service to unserved and underserved areas in Brazil – primarily households and small businesses. Our coverage footprint will reach over 85% of the population of potential customers who do not have adequate broadband access, where it’s simply not feasible or economical for a provider to offer terrestrial services. Of course, employing our proven JUPITERTM System platform, that’s not an issue— it’s the same cost, the same solution, regardless of where we provide it.
Q. What were the main challenges in the HughesNet launch?
A. Our initial challenge was to build the necessary organization in Brazil. We have been in business successfully providing satellite services here since 2003, focused on large enterprise and government agencies. But consumers and small business represent a different market segment. Hence, we needed to build the right team – not replace an existing one – and to bring specific market knowledge and expertise to the company that didn’t exist before. Now we have two major lines of business.
The second challenge was related to distribution, meaning sales, logistics, and installation. As a starting point on this front, we identified a partner in Brazil to help us create a network of distributors and dealers, which took all of 2015. That partner is Elsys, a company which has more than 35 years’ experience selling products and services in Brazil.
Our third challenge was to build market awareness of the HughesNet brand and this is a process that will take time. We need to be very creative to promote our brand to our key addressable markets in a cost-effective way.
Q. In Brazil, Hughes will replicate its successful North American model, where retail operations sell direct, together with a series of wholesale partners, dealers, and agents. Can you talk about the importance of that strategy?
A. The fact that we have a highly successful operation in North America has allowed us to leapfrog several steps. We get excellent guidance on what does and doesn’t work, and have tried to replicate and adapt proven systems, procedures, and processes as much as possible. We’re not going to reinvent the wheel. If we find something that doesn’t work well in Brazil, we tweak it or discard it. This has been critical for us. We could not have launched as successfully or as quickly, without the history and support of the Hughes North America organization. It’s a key advantage for us.
Q. Why did it make sense to expand into consumer services in Brazil now?
A. Given the company’s success in North America, it was only natural to leverage it and expand internationally. Brazil was chosen for several reasons. First, the company believes there is significant demand for satellite broadband services in Brazil. Second, because Hughes has been operating in Brazil for more than a decade, we have established a successful organization here that could be easily leveraged for the consumer business. Finally, it is worth mentioning that the regulatory aspects of the satellite and broadband services in Brazil are well-known and business friendly, which reduces risk.
Q. Can you explain the purpose of geo-marketing strategies?
A. It’s all about drilling down to the details of the market demand, which underpins our entire business case. Brazil has roughly 6,000 municipalities. We are covering about 4,000 of those with the Ka-band coverage from Eutelsat’s 65 West high-throughput satellite, which we acquired—reaching 85% of the target unserved and underserved population. We used geo-marketing tools to analyze those municipalities and understand where the demand was, based on number of households, existing infrastructure (or lack of it), and other factors. It is a structured and methodical way to understand the market.
Q. What are the company’s short-term, as well as long-term, strategic goals for the Brazilian market?
A. In the short term, we are following a graduated rollout plan to provide service to 20 Brazilian states. Our goal is to open up these states during the second half of 2016. And our primary focus is to be certain that we can provide good service to all of our new customers throughout these regions.
In the longer term, we would like to emulate the tremendous success of our North American colleagues and make HughesNet the #1 satellite service across all of Brazil! Vamos botar pra quebrar!