HughesNet to Focus on Unserved and Underserved Markets

Hughes CEO says the company will avoid regions with existing broadband

In a recent conference call concerning company developments EchoStar, a satellite broadband provider, said its HughesNet consumer broadband service added an additional 72,000 subscribers in the last quarter bringing the total to 807,000 net subscribers.

This performance far outpaced its closest competitor, ViaSat. Through its new partnership with satellite television provider DirecTV as a sales agent, HughesNet’s popularity shows no sign of slowing down. This is despite the fact that the year’s end is generally not a good time for consumer satellite broadband customer contracts.

Once called Jupiter 1, the EchoStar 17 satellite that was put into service in early October 2012 has been loaded with 441,000 of the 807,000 subscribers to the HughesNet service. Over the year since EchoStar 17 was made commercially available, 212,000 new subscribers have been added to the HughesNet consumer broadband service.

In contrast, California based ViaSat Inc. and its broadband service, Exede, had a net gain of only 41,000 subscribers in the quarter, bringing its customer base to 591,000. Like EchoStar, ViaSat Exede has a new record-setting throughput satellite named ViaSat-1. The company, however, reported 51,000 defections in the quarter.

Customers were leaving the service in large numbers for higher-speed fiber or terrestrial cable alternatives. These customers, who were not informed of any limitations, bumped up against the typical volume limits of satellite broadband and left the service.

Exede has been testing the limits of ViaSat-1’s appeal by competing for customers in areas that already have existing broadband services. ViaSat’s Exede bumped up against its own limits when it sold to households with fiber or cable access. In neighborhoods with lower-end DSL subscribers, it fared a little better.

In the conference call, Hughes Chief Executive Pradman P. Kaul said the company would be focusing on regions with inferior terrestrial service and those with no broadband alternatives. “Very few [of our customers] have a choice of DSL,” said Kaul. “We still focus on the unserved and underserved markets.”

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