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Hughes Revenue Up, Subscribers Down; Working With OneWeb on Hybrid Offering

By | August 3, 2021
Hughes Network Systems campus in Germantown, MD. Photo Credit: Hughes

Hughes Network Systems campus in Germantown, MD. Photo Credit: Hughes

Hughes Network Systems saw an 8.6% boost in revenue during the second quarter of 2021 compared to 2020, driven by higher sales for equipment and consumer broadband. This revenue growth came despite a decline in subscribers for the third quarter in a row.

Hughes had 1,542,000 broadband subscribers as of June 30, 2021, down 11,000 from the previous quarter. This came from a 20,000 decline in U.S. subscribers, offset by a 9,000-subscriber increase in Latin America. Hughes now has 398,000 subscribers in Latin America, and 1,144,000 subscribers in the U.S. These numbers were reported in parent company EchoStar Corporation’s Q2 results on Tuesday. 

In addition, Hughes President Pradman Kaul said that Hughes is working to develop a hybrid Low-Earth Orbit/Geostationary Orbit (LEO/GEO) network architecture in partnership with OneWeb. He said more announcements on this are expected in the next six to nine months. 

“We have an investment and partnership with OneWeb, we’re developing service plans and network architectures with them for many parts of the world,” Kaul said. “We are fortunate to have a strong GEO presence with the Jupiter platform in almost every region in the globe. With OneWeb getting into service in ‘22, we will see some of these architectures played out.” 

Kaul also addressed the potential of satellite broadband being included in broadband subsidies as part of the U.S. infrastructure bill in the works. He said Hughes believes it can meet latency requirements with a hybrid architecture in order to receive potential government subsidies. 

“At this stage, the details of these programs are not firmed up, and there’s a lot of debate going on. But we expect we’ll be able to come up with an offering that meets the speed, bandwidth, and hopefully latency with diverse architecture, to get a piece of that pie,” Kaul said. 

Financial Results

EchoStar reported consolidated revenue of $499.8 million — an 8.8% increase over the same time last year. Revenue attributable to Hughes — which makes up most of the company’s revenue — was $492 million. Hughes segment adjusted EBITDA increased $21 million year over year, driven by growth in revenue and higher adjusted EBITDA margin.

Net income for EchoStar increased $49.9 million from Q2 2020 to $35 million. The increase came from higher operating income and higher gains on investments, partially offset litigation expense and higher income tax expense. 

EchoStar CEO and President Michael Dugan called the financial performance outstanding.  “We remain focused on increasing the yield on our existing assets and operating the business in an efficient manner while also building the ground network and operational processes to place our next satellite, EchoStar XXIV/JUPITER 3, into service as quickly as possible,” Dugan commented. 

Hughes is still on track for a launch in the second half of 2022, in line with expectations from the past two quarters. This satellite will deliver more capacity to capacity-constrained North America.