Hughes Revenue Slightly Up in 2022 Despite Subscriber Decline
Hughes Network Systems grew revenue by $10 million 2022 compared to 2021, despite a 16% drop in subscribers as the satellite operator faces competition from SpaceX’s Starlink business. Parent company EchoStar Corporation reported full-year financial results on Feb. 22, including comments on a future wideband, direct-to-device offering.
Hughes revenue in 2022 was $1.97 billion, compared to $1.96 billion in 2021. Hughes accounts for most of EchoStar’s revenue. Company-wide, 2022 revenue was $1.998 billion compared to $1.985 billion in 2021.
EchoStar net income more than doubled — increasing 166% to $167 million. The increase was primarily due to higher operating income, a favorable change in net interest expense, favorable change in investments of $42.5 million and $55.3 million related to the impairment of the Dish Mexico equity investment that occurred in 2021. The company had $1.7 billion in cash as of December 31, 2022.
Hughes Broadband Subs Down, Gov Business is Up
Hughes broadband subscribers declined 16% during 2022. The company ended the year with approximately 1,228,000 subscribers after shedding 57,000 in the fourth quarter.
Hughes is capacity constrained while it waits for the launch of the Jupiter 3 satellite, confirmed for the second quarter of this year on a SpaceX Falcon Heavy rocket. It also faces competitive pressure from Starlink’s satellite broadband business.
“For the full year of 2022 we faced competition from Starlink, which brought significant capacity to the market and we did not have access to the benefits of our upcoming Jupiter 3 system,” EchoStar CEO Hamid Akhavan said on a Thursday call with investors. “While our consumer broadband business has been impacted by capacity constraints and other factors, we have continued to increase revenue by capitalizing on enterprise and government opportunities, both domestically and internationally.”
Hughes new Chief Operating Officer Paul Gaske, succeeding President Pradman Kaul, said on the call that Hughes restructured its portfolio of consumer service offerings in 2022 to align with market demand. The company is shifting service plans toward higher capacity, higher price to improve ARPU and customer experience.
Gaske also gave an update on the OneWeb ground segment deal, reporting Hughes has shipped 32 gateways at the end of 2022 and will complete the total of 44 gateways this year on time. Hughes also saw “significant” Jupiter system equipment sales around the world including from a major oil producer in Mexico to upgrade its existing Hughes system and a network expansion and LTE backlog connectivity with a telecommunications service provider in Africa. In addition, Gaske said the company’s government business ended the year with record revenues, and it has been growing with the development of network and security management tools and terrestrial and 5G non-terrestrial network (NTN) technologies.
EchoStar IoT Constellation a ‘Stepping Stone’
Echostar recently tapped Astro Digital to manufacture a constellation of 28 Low-Earth Orbit satellites for S-band IoT services, and this constellation is a “stepping stone” toward a future wideband, direct-to-device offering, Akhavan said. EchoStar will operate the constellation from its Australian subsidiary, EchoStar Global.
EchoStar is working to engineer a “truly transformative wideband LEO-based 5G NTN [non-terrestrial network] capability,” he said.
“The LEO constellation will serve as a foundation for engineering 5G narrowband NTN-based capabilities, building on 3GPP Release 17 and beyond,” Akhavan said. “[It] is a stepping stone towards our main goal and ambition to build the leading wideband, perhaps the only wideband 5G NTN system to follow, which we have been working on.”