EchoStar Outlines Impact of Russian Proton Failure, Future Plans in Brazil

[Satellite News 08-09-12] The failed launch of a Russian Proton rocket carrying two communications satellites earlier this week has forced EchoStar to push back the launch of a satellite that it planned to use to expand the HD channel capacity of its sister company, Dish Network, EchoStar Executive Vice President and General Counsel Dean Manson confirmed during an Aug. 9 conference call.

   Manson said EchoStar planned to launch the EchoStar 16 satellite from Baikonur in September aboard the same type of Proton rocket that failed to reach orbit Aug. 6.
“We will keep EchoStar 16 in our Palo Alto, Calif. storage facility until an investigation into Monday’s failed launch is completed,” said Manson. “A malfunction in the upper stage appears to have left the satellites short of their intended orbits. While the investigation into what caused the malfunction of the upper stage has already commenced, it appears certain this will cause a delay of some sort in the scheduled September launch of EchoStar 16.”
EchoStar has not yet established a future launch date for the satellite.
   Russian space agency Roskosmos established an inter-agency commission to investigate the failure of a Proton rocket’s Breeze-M upper stage that led to the likely loss of Russian Satellite Communications Co.’s (RSCC) Express-MD2 satellite and PT Telekomuniksasi’s (PT Telkom) Telkom-3 spacecraft. Both satellites were placed in a useless orbit.The most recent launch failure was the Breeze-M engine’s second incident during the past year following an anomaly that occurred in August 2011 that destroyed RSCC’s Express AM4 satellite.
   The Space Systems/Loral-built Ka-band satellite EchoStar 17 was successfully launched by Arianespace and placed into its permanent geosynchronous orbital slot of 107.1 degrees West in July. “All deployments and transfer orbit operations have been completed successfully and payload in orbit tests have progressed nicely,” Manson said during the conference call that accompanied EchoStar’s latest financial results.
   EchoStar reported 2012 second-quarter net income of $36 million, which doubled the $18 million it reported for the corresponding quarter last year. Second quarter earnings-per-share were $0.41 in 2012, compared with earnings-per-share of $0.21 for the same period in 2011. The performance was well above analysts’ expected earnings-per-share projection of $0.08 for the quarter. The operator’s total revenue also increased 38 percent in the second quarter to $806 million, compared with $584 million reported in 2011.
   EchoStar President and CEO Michael Dugan also joined in the call to update investors on the status of its high-throughput Jupiter platform that is scheduled to begin commercial operations by the end of September.
   “Jupiter high-throughput technology will enable us to offer fourth-generation satellite Internet service, which is designed to dramatically increase Internet browsing performance and support high-bandwidth applications such as video and music,” Dugan said on the call. “HughesNet Gen4 customers will be able to obtain faster speeds and a very high download capacity, so they can experience Internet access at its fullest. Hughes new order input continued a strong pace in the second quarter. We have significant orders in our North American enterprise business including National Oilwell Varco, Row 44, ConocoPhillips, Blockbuster and Xplornet.”
   During the call, Pradman Kaul, president of EchoStar subsidiary Hughes, also discussed an award won by its own Brazilian subsidiary during an auction conducted by Brazilian telecom regulator Anatel in August 2011. Hughes recently completed the prerequisites and executed the license agreement with Anatel this past May.
   “We’re currently at an advanced stage of negotiations with potential partners for a joint venture to provide DTH service and are looking forward to expanding our business in one of the fastest growing regions in the world,” said Kaul. “Our subsidiary in Brazil has business that focuses on the enterprise sector and it is doing very well. We continue to look at the potential of starting a broadband consumer service business in Brazil, but at this stage have not made enough progress to publicly talk about our efforts there.”
   Dugan also identified a potential for DTH growth in Brazil. “We have been exploring options with partnering and forming a joint venture,” said Dugan. “These options have been based around working with a partner with significant in country sales marketing distribution experience that we think will be nicely complemented by our strong set-top box and satellite systems knowledge.”

Related Stories