34 www.satellite-evolution.com | July/August 2016

....Q&A Hughes International Division

Spearheading the adoption ofsatellite networks and servicesFrom its roots in 1971 as Digital Communications Corp and inventing the commercial VSAT in themid-1980s, Hughes has led the way in spearheading adoption of satellite networks and servicesaround the world. Since 2011, Hughes has been part of EchoStar, and today offers an ever-expanding range of innovative technology solutions and managed services across all marketsectors – enterprise, government and consumer. HughesNet®, the company’s top-rated consumersatellite Internet service, has over one million subscribers in North America, while cumulativeshipments of more than five million terminals to customers in over 100 countries validates aglobal market share of around 50 percent. Amy Saunders met with Dave Rehbehn, VicePresident of Hughes International Division, to find out more about the company’s development,presence and plans for the future.

Question: Hughes is one of thepioneers of satellite communicationsin the global marketplace. Can youprovide an overview of how thecompany evolved over the years towhere it is today?Dave Rehbehn: Hughes NetworkSystems was formed in 1984 throughthe acquisition by Hughes Electronicsof Digital Communications Corp, aMaryland-based start-up that beganprimarily as a technology and systems

innovator. The invention of thecommercial VSAT followed soonthereafter, and with the first system saleto Wal-Mart, launched the satellitenetworking business, primarily toenterprises.

This equipment business hasfuelled the company’s growththroughout the decades, spreading theadoption of VSATs globally to majorcorporations, telecom operators andgovernments. Services were initially a

small percentage of sales, but duringthe last decade evolved into a largershare of revenue. As the Internet tookoff, Hughes pioneered high-speedsatellite Internet service for consumers,which combined with steady growth ofenterprise managed services, hasresulted in service revenues exceeding75 percent of total sales. Today, Hugheshas over one mill ion HughesNet®

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Q&A Hughes International Division....

enterprise sites under its managedservices brand, HughesON™, and ourJUPITER System is now the leadingchoice for high throughput satellite(HTS) operators on every continent.

The potential in both the enterpriseand consumer markets prompted us tomake major capital investments over theyears to expand satellite capacity, whichreally tells the story of our development.Prior to the launch of SPACEWAY-3 in2008, the world’s first satellite with on-board switching and routing, we leasedcapacity. However, the rapid growth ofthe early consumer business - spurredby demand for Internet access bymillions of households unserved orunderserved by terrestrial broadband -and steady growth of enterpriseservices, justified an investment in ourown satellite.

We launched SPACEWAY with thegoal to deliver a new generation ofpoint-to-point mesh services forenterprises and government, butconsumer growth eclipsed that modelas most capacity went to feedHughesNet service. This prompted thedevelopment and launch in 2012 ofEchoStar XVII, our 100-plus Gbpssatellite. Today, EchoStar XVII carriesmost of the HughesNet subscribertraffic, and will be augmented by the endof 2016 with the launch of the EchoStarXIX HTS, with over 180Gbps, to meetcontinued market demand. EchoStarXIX increases our coverage area,subscriber array and variety of services.It will also allow us to expand intoMexico, where we have signed asignificant deal with StarGroup to re-sellmuch of our capacity.

In addition, with our lease of Ka-band capacity earlier this year onEutelsat’s HTS satellite at 65W, we arenow poised to launch HughesNet high-speed satellite Internet service in Brazil,expanding on our success in NorthAmerica.

Question: What regions is Hughesactive in, and where is it looking toexpand its presence?Dave Rehbehn: Between our serviceand technology businesses, Hugheshas a presence in more than 100countries around the world. Consumerand enterprise managed services nowrepresent about 80 percent of ourbusiness, with equipment andtechnology sales making up theremaining 20 percent.

Besides the US, Hughes owns andoperates service businesses in Europe,India and Brazil, and supports an ever-growing number of service providerpartners around the world, includingRussia/CIS, throughout the Pacific Rim,Middle East/Africa and Latin America.We’re providing direct service in Indiaand booking hardware sales incountries like Malaysia, Myanmar andIndonesia. In November 2015, weannounced a contract to provide Yahsatwith our JUPITER System for the Al Yah3 satellite’s Africa coverage. We’ve alsodelivered the JUPITER System forTelefónica’s Media Networks LatinAmerica, which is using it to provide

broadband services in Latin America,as well as to Russia Satell iteCommunications Company (RSCC)and Türksat for use with their respectivesatellites.

You can expect a lot of activity fromus in Latin America in the near future.We will be offering wholesale and directretail services there very soon. Forexample, we acquired all of the BrazilKa-band payload on the recently-launched Eutelsat 65 West A, whichcovers about 85 percent of the Brazilianpopulation. We plan to turn on thatservice and start selling there in July.

We expect the primary demand tobe for Internet access for households,communities and government projects,and for cellular backhaul. Satellitebackhaul is being recognised as a rapidand cost-effective way to expandcellular service, including mobileInternet access where terrestr ialbackhaul using fibre, cable ormicrowave is simply not cost-justified.On-the-move and aeronauticalcommunications are the other big areasfor growth, which are again driven byInternet access.

Question: You’ve highlighted cellularbackhaul as one of the major areasof growth in the coming years. Whatis Hughes doing in terms of cellularbackhaul right now?Dave Rehbehn: For us, satell itebackhaul for cellular systems is

Dave Rehbehn, Vice President ofHughes International

In the Democratic Republic of Congo, Hughes is delivering the cellular backhaulservices that will support a large African mobile operator’s efforts to bring phonetechnology to this and other remote areas on the continent. Photo Susan Schulman

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....Q&A Hughes International Division

becoming a large market segment andwe’re looking to do more in that arena.

We recently announced a newproject for Entel Bolivia, with a 500-plussite 3G and 4G LTE network. Thecompany acquired a JUPITER Systemand around 550 terminals to provide asatellite broadband network to extendcellular and Internet access in remoteareas. The project is situated in a verymountainous, rural area. The basestation will serve the community andhandle traffic to the core of the networkover satell ite l inks, which couldotherwise not be justif ied usingterrestrial microwave or fibre.

We provided a similar system for acustomer in the Democratic Republic ofCongo (DRC), where the roads arevirtually non-existent. Almost everythinghad to be carried to the site by hand asthe trucks could not progress anyfurther. Due to the harsh environment,all of the equipment had to becompletely self-contained and, as a lotof these areas had no power, solarpanels were necessary. You mightwonder, ‘If there’s no service, who’s gothandheld devices to use?’ But it turnedout that a lot of the target consumershave phones that they use when theytravel into the larger towns and cities.

As well as the challenge ofinstallation, there are also theeconomics of reducing the cost ofcellular backhaul services down to apoint where the service can be offeredby satellite and still run at a profit. We’veseen that satellite capacity prices arecoming down, and we think we’ll be ableto achieve some price points that makecellular backhaul more attractive.

Question: Do you think thatovercapacity is a pressing issue inthe satellite sector?Dave Rehbehn: I think that there willbe some overcapacity soon, but it willbe a short-term issue. By the end of2016, Hughes will have threeoperational satell ites with almost300Gbps of capacity, and there’s not aglut there. We know exactly what we’lldo with that capacity.

If you look around the world, it’s allabout Internet access. The InternationalTelecommunication Union (ITU) hassaid that there are around four billionpeople who don’t yet have broadbandaccess. Many of those people can’tafford a lot, but that’s where communityVSATs will come into play. Thosesystems will deliver broadband tomultiple people instead of individual

households, with delivery mechanismslike Wi-Fi hotspots and LTE dataservices. I think there’s tremendousdemand. It’s all about building out theservices and offering those services atgood price points so that, in developingareas, we can find ways to deliverbroadband economically.

Question: Where does Hughes seeitself in the market compared to itscompetitors?Dave Rehbehn: The thing about thesatellite service sector is that it’s not azero-sum game. For example, when itcomes to North America, the only othersatellite broadband provider to speakof is ViaSat, formerly WildBlue. Themarket is so big, ViaSat’s existenceactually helps us; its marketing raisesawareness of the availability of satellitebroadband in the marketplace, which inturn raises demand.

When WildBlue launched its firstsatellite, Wildblue-1, in 2006, we wereleasing satellite capacity from Intelsatand SES. We had some very realconcerns that the launch would have asignificant negative impact on ourbusiness, but exactly the oppositehappened. WildBlue launched itssatellite and started strongly promotingits service, and our subscriber numbersactually jumped. Today, between the twoof us, we are approaching two millionsubscribers in the US, which, if you thinkabout it, is still a relatively small numberconsidering the market opportunity.There are well over 10 mill ionhouseholds that are either unserved orunderserved by terrestrial broadband.

Question: What challenges doesHughes face in the markets that itoperates in?Dave Rehbehn: It’s all about targetedmarketing, that’s the main challenge,and we’re very careful in our approach.In the consumer market we’re lookingfor customers who are either unservedor underserved by terrestrial. But in theenterprise managed services market,we deliver full turnkey services includingwhichever access technologies may bejustified depending on the customer andtheir network architecture - whetherusing terrestrial fixed, wireless orsatellite.

Our US consumer group is focusedon identifying and tracking connectivitythroughout the country, down to sub-zipcode levels. The group identifiespopulated areas where people don’thave access to good quality terrestrial

coverage. Our mission there is toeducate them, to let them know that youcan get good quality broadbandanywhere in the country even if youdon’t have access to fibre.

There’s so much variation in Internetquality and availability across countries,especially in one as big as the US.Different providers make differentpromises, and, in some cases, it canbe hard to tell who’s offering the bestdeal.

Accordingly, the Federal Communi-cations Commission (FCC) performsevaluations of all Internet serviceproviders in the country, looking atwhether companies are delivering ontheir download and upload speedpromises to customers. In 2016, wecame out number one against everyother ISP, including the fibre companies.The FCC found that we actually delivergreater download speeds to oursubscribers than we advertise. We’reextremely proud of that.

Question: What are Hughes’ plans forthe next couple of years?Dave Rehbehn: In 2016 and 2017 we’llbe focused on executing on our newcapacity. With the launch of Eutelsat 65West A, we’ll be going from zerosubscribers in Brazil, to hopefully verymany. It’s going to take a big effort tobuild those subscribers to a decentnumber. That’s going to be a major focusfor our service area. With the launch ofEchostar XIX towards the end of thisyear, the services that we’re providingwith that satellite will also be a majorfocus. We’ll probably be tweaking theservice plans to fit that capacity.

On the hardware side, the focus willbe on continuing to engage with any andall satellite operators who are planningHTS capacity.

There are a lot of HTS projects goingon; it seems like just about every satelliteoperator is doing an HTS package in oneform or another. As older satellites arereplaced, operators buy a new satellite,replace the C-band and the Ku-band,and then add a payload for Ka-band. Weneed to make sure that those operatorsknow about the JUPITER System, andthat they consider it as a platform. Whilethe JUPITER System is really good forHTS, it’s also great for conventionalsatellites. The remote terminals in theJUPITER System support more than100Mbps of throughput, so conventionalsatellite operators can make bandwidthsavings and performance improvementsas well.

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