EchoStar Seeking to Broaden Services to International Markets
EchoStar will likely speed plans to broaden its services business to international markets as it pushes into Brazil and potentially Europe after taking control of five satellites from Dish Network, EchoStar executives said Friday on an earnings call.
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The satellite services company agreed earlier this year with Dish to take over EchoStar-1, EchoStar-7, EchoStar-10, EchoStar-11 and EchoStar-16 satellites, while transferring 80 percent ownership of Hughes Satellite Systems’ consumer broadband business to Dish. The Hughes Retail Group will contain the broadband business, which includes the HughesNet service that had about 915,000 subscribers March 31, up from 860,000 in December and 692,000 a year earlier, the company said.
The company has since reached agreement in April with Eutelsat do Brasil to provide Hughes Telecommica with spotbeam Ka-band capacity for a broadband offering on the Space Systems Loral-built Eutelsat 65 at 65 degrees west when it goes into service in March 2016. The satellite has 24 spotbeams that can cover major urban and suburban markets in Brazil. EchoStar bought the 45 degrees west orbital slot in late 2011 for $80 million from Brazilian telecom agency Anatel. EchoStar has yet to land a partner for a potential broadband service in Brazil, but work in that country “continues on pace,” said CEO Michael Dugan. EchoStar also signed a pact in April with Space Systems Loral to build the EchoStar-23 satellite that would go into service in Q3 2016, the company said. The pact replaces EchoStar’s earlier construction agreement with Loral for CMBStar, the construction of which was suspended in 2008 after a joint venture to provide mobile satellite services in China collapsed.
EchoStar also acquired Dublin-based Solaris Mobile, which has a European Union license to provide mobile satellite services in Europe using S-band spectrum. EchoStar also has a contract for the Eutelsat 10A satellite. It bought Solaris from SES and Eutelsat, which had dropped plans for S-band service after failing to reach agreements with telecom firms. EchoStar continues to provide service for Dish Mexico, although Q1 revenue from that venture fell to $8 million from $15 million a year earlier.
EchoStar Q1 profit improved to $12.6 million from $3.4 million as revenue grew to $826 million from $795 million, despite a downturn in Dish-related sales to $305 million from $308 million. EchoStar’s Dish-related services revenue increased to $184.5 million from $139.9 million, the company said.