[Satellite News 08-04-11] U.K. satellite operator Avanti Communications has signed another contract with its mutual repeat customer Hughes Network Systems to provide additional Hylas-1 capacity on top of Hughes’ initial purchase in September 2009, the companies announced Aug. 3.
Avanti CEO David Williams said that Hughes required a new contract for additional satellite beams above the original $12.2 million commitment to support Hughes’ business with its longstanding client Bentley Walker, which is currently installing Hylas 1 services in the United Kingdom and Spain. The original deal allowed Hughes to acquire Hylas capacity during the next 10 years in an effort to grow its business in Europe and included a partnership to sell Hylas services to Avanti’s customers in the oil and gas and lottery sectors.
“Hughes is an important partner for Avanti with existing contracts in relation to Hylas 1 and Hylas 2,” Williams told Satellite News. “With more than 70 customers now installing Hylas 1 services in 14 countries across Europe, we have the distribution in place to fully sell out all of its Hylas 1 capacity within our three-year target.”
Hughes’ expanded partnership with Avanti also could support the company’s efforts to tap into the U.K. rural markets. In May, Hughes Europe announced details of a new initiative highlighting the benefits of satellite broadband to rural communities in the United Kingdom. Hughes Europe teamed up with the Country Land and Business Association (CLA) in the United Kingdom to demonstrate how satellite technology can provide rural communities with effective, affordable broadband services.
In April, Hughes signed an $18 million, multi-year agreement to supply Avanti with advanced Ka-band networking infrastructure for Avanti’s Hylas 2 satellite. “This is the second stage of an exciting win-win agreement with Avanti. … It positions us to rapidly expand Ka-band services across Europe and the Middle East,” Hughes CEO Pradman Kaul said in a statement.
That deal built on another previous Hughes contract, when Avanti paid the company $24 million to supply 48 advanced Ka-band system gateways for Hylas 2, scheduled for launch in 2012. The Ka-band architecture was designed to enable efficient delivery of bandwidth-demanding services, such as digital signage and distance learning for enterprises, and large-scale, high-speed Internet services for Avanti’s consumers and small business customers.
“Hylas 2 remains on track for its scheduled launch,” said Williams. “In the meantime, we continue to see very strong interest in the capacity to be provided by Hylas 2, particularly in the developing countries that it will cover. This interest is from existing Hylas 1 and new customers.”
Avanti launched its Hylas 1 dedicated Ka-band satellite into orbit in November 2010 and activated its broadband services in March 2011. Avanti plans to launch Hylas 2 in the second quarter of 2012, extending its coverage to Africa and the Middle East. Williams added the operator is currently seeking financing for a third satellite, Hylas 3.
“Avanti confirms 186 megabits of capacity with the balance of 114 megabits (not included in backlog) expected to be taken up. The combined value of the backlog and pipeline amount to over three years of our estimated peak sales on the two satellites," Jefferies International Satellite Equity Analyst Nick Bell told Satellite News.