Hughes Launches Two-way Broadband In Europe

Hughes Networks Systems (HNS) has launched its DirecWay two-way satellite broadband service in Europe. At the same time, HNS announced that the opening of its new European operations centre in Greisheim, Germany.

With this announcement, HNS hopes to steal a march on its rivals in Europe and tap into the growing need for broadband value-added services such as video and Internet. The new service will enable organizations to deploy products and services such as interactive training, distance learning, e-commerce services, IP multicasting and video advertising. HNS will be a wholesale provider of these services to companies such as ISPs/ASPs.

Roberto Campitelli, CEO of HNS Europe, told Interspace in an exclusive interview, “Up until now we were supplying our services mainly to large corporations, which means tailoring the network to specific requests. Now, we are addressing the one-site customers such as SOHOs or SMEs for the first time.”

HNS believes it does not need to gain huge numbers for its broadband services in order to succeed in Europe and is targeting niche markets. “We are in a niche market. I am totally convinced DSL will not cover the whole of Europe. We have 330 million people in Europe; 10 percent is 33 million people so that is the idea behind that,” noted Campitelli.

The news of the SES Global/Alcatel/ Gilat joint venture to go after the European broadband market should make the markets a lot more competitive going forward. So, has Gilat stolen HNS’ thunder? Campitelli comments, “The difference is they are announcing, we are doing. Gilat tried to get the large players like Tiscali or BT. I have some doubts. I believe these companies are just too large. Satellite is one of their applications but not one of the most important ones. We want to have people fully dedicated. There are a lot of words and noise, but practically nothing.”

In terms of service revenues, HNS expects a positive 2002. Campitelli said: “This year, we are perfectly on budget. We will generate $72-73 million in terms of service revenues. I hope to get more than that. I think we could double that. The growth is such that we could double that.”

HNS clearly sees Europe as a major market. The real increase in revenues may not happen until it brings SpaceWay to Europe, which will probably be another three years down the line. It will be the next generation platform for DirecWay. SpaceWay will provide true bandwidth-on-demand. It would enable HNS to rapidly increase the amounts of revenues it generates from broadband services. Campitelli said: “The main point of SpaceWay – it is a hubless kind of system, therefore you can transmit and receive broadband from any point. We are just waiting. We are launching it in the U.S., which is better for Europe. It will be completely tested in the U.S. before having it here. It will be in service in the U.S. in 2004. We could launch a satellite in Europe 6-7 months after the U.S.”

–Mark Holmes