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Hughes Plans Rural Internet Satellite Service

March 27, 2006

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Now that it has sold its DirecTV satellite television business, Hughes Network Systems says it will launch a campaign to sell satellite Internet access to small businesses and consumers in rural areas under the HughesNet brand. It already has about 275,000 customers taking its DirecWay satellite broadband service.

Hughes, an earlier innovator in satellite communications, developed the DirecTV service in the 1980s. Hughes was taken over by Rupert Murdoch's News Corp. in late 2003 and Murdoch moved DirecTV to a separate company, then sold his interest in Hughes to private investors. Hughes went public a few weeks ago.

"This is the beginning of an exciting new era for Hughes," said Pradman Kaul, Chairman and CEO. "The new HughesNet brand underscores our corporate commitment to enable our customers to realize the full potential of broadband solutions and services, utilizing the best of satellite and terrestrial technologies."

Hughes' primary business today is managing satellite networks for Wal-Mart and other large corporations, linking facilities throughout the country. HughesNet is intended to expand its reach into smaller businesses and professional services firms in areas where DSL and cable Internet are not available.

In June of 2005, the editors of Fortune called Wal-Mart’s deployment of VSAT technology one of the top 20 decisions that "shaped the modern world of business."

But there are only so many Wal-Marts and Hughes' new focus is on the consumer market, including small and medium-sized businesses, Kaul said.

At a starting price of about $60 per month, satellite broadband may not be price-competitive with broadband and DSL, but it is seen as a good fit for businesses that would otherwise be stuck with dial-up service or dedicated broadband circuits costing more than $1,000 per month.

It's estimated thtere are at least 15 million U.S. homes without access to Internet broadband service. Most of them are in rural areas.

In 2004, when it was under the Murdoch thumb, DirecTV announced it was abandoning its plans to develop satellite broadband for the home market but its kept the DirecWay service running for existing customers.

HughesNet encompasses all broadband solutions and managed services from Hughes, bridging satellite and terrestrial technologies. Hughes has shipped more than 1 million systems to customers in over 100 countries. Its broadband satellite products are based on the IPoS (IP over Satellite) global standard, approved by the TIA, ETSI, and ITU standards organizations.

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