EchoStar to Complete Move of EchoStar 15 to Orbital Slot for Brazil Within Two Weeks

EchoStar’s EchoStar 15 satellite will be operational in the 45 degrees west slot by early fall as negotiations to secure a partnership continue, Chief Financial Officer David Rayner said at the Stephens Investment Conference. The satellite is expected to complete the move to the new slot within two weeks and go into operation 60-90 days later, Rayner said. The new satellite and the potential for providing service will be key as EchoStar seeks a partnership agreement in Brazil. EchoStar hasn’t identified potential partners, but is seeking those with a “market presence” in Brazil, Rayner said. Among the candidates are Telefonica Brasil and Oi, analysts have said.

EchoStar has been “diligently working” at securing a partnership for a DBS service in Brazil, but has had several potential agreements scotched in the last 18 months amid management changes and other issues, Rayner said. “Think of a scenario and we have probably been there” in terms of negotiating potential partnerships, Rayner said. Some discussions reached the contract stage before breaking down, he said.

EchoStar bought the 45 degrees west orbital slot in late 2011 for $80 million from the Brazilian telecommunications agency Anatel. The 32-transponder Ku-band EchoStar 15, which went in operation in 2010, is capable of serving the major markets in Brazil and will do so until a new satellite for the country is built, which typically takes three years, Rayner said. EchoStar 15 had been a backup for EchoStar sister company Dish Network and will likely be replaced by EchoStar 8, which launched in 2002 and is at 77 degrees west. EchoStar also is moving EchoStar 6 to 96.2 degrees west from 77 degrees west, but the satellite, which launched in 2000, has “limited life” left, Rayner said.

The company recently signed an agreement with International Launch Services for a launch using its Proton Breeze M rocket. The satellite launch is planned for 2015-2016 from the Baikonur Cosmodrome in Kazakhstan. Rayner declined comment on whether it would be carrying EchoStar 19. EchoStar signed a construction contract for the EchoStar 19 multi-spotbeam Ku-band satellite earlier this year that will provide added capacity for the HughesNet Gen4 broadband service. Construction of the satellite began in March, Hughes Communications President Pradman Kaul said. Analysts have speculated that the Proton rocket could also be for the TerreStar 2 satellite, which is expected to be used for mobile services including wireless. EchoStar got access to TerreStar 2, which was built by Space Systems/Loral, when Dish bought the assets of TerreStar Networks out of bankruptcy in March 2012. The satellite is to operate in the previously unavailable 2 GHz frequency band.

EchoStar 17, which went into service at 107.1 degrees west last year, had taken on 270,000 subscribers by late March to EchoStar’s Hughes Communications’ HughesNet Gen4, Dish’s dishNet and Frontier Communications’ satellite broadband services, Kaul said. HughesNet had 692,000 subscribers by late March, some of whom also receive service from the Spaceway 3 satellite. About 80 percent of Gen4 customers are getting the entry-level package that starts with a $59 monthly fee for 10 Mbps/1 Mbps download/upload speeds and a 20 GB monthly data cap, Kaul said. Hughes has been promoting the entry-level package recently with a $39 monthly fee for the first three months and free installation, the company said. HughesNet Gen4 also is sold in 10 Mbps/2 Mbps at $79 and 30 GB and 15 Mbps/2 Mbps and 40 GB packages at $99 monthly.

Subscriber growth on Dish Mexico has slowed in the past 12-18 months as the service has been unable to gain access to local channels, Rayner said. EchoStar provides service to Dish Mexico from the EchoStar 8 and EchoStar 1 satellites at 77 degrees west. Dish Mexico, a joint venture between Dish Network and MDC Communications, has more than 2 million subscribers, analysts have said. EchoStar’s sales to Bell Canada for its ExpressVu satellite service have also slowed as the company prepares for a “technology upgrade” in 2014, Rayner said. Among the products Bell is considering adding is the Hopper DVR/satellite receiver that Dish Network has deployed in the U.S., EchoStar executives have said.