EchoStar confident Jupiter-2 can best ViaSat-2 in the market
February 27, 2017
Key takeaways from the EchoStar 4th quarter earnings results:
— Details announced on subscriber packages for next-gen broadband.
— $3-billion war chest remains untouched.
— Brazil satellite broadband venture promising, but falls short of goal.
— Satellite aero-broadband play in the works, but not yet firm.
— European S-band mobile satellite service ground license status unclear.
PARIS — EchoStar Corp.’s Hughes division on Feb. 25 dismissed the idea that its HughesNet Gen5 U.S. consumer satellite broadband service, to enter service by late March, cannot match competitor ViaSat Inc.’s coming ViaSat-2.
Hughes also said it is on the verge of signing a customer for its next-generation aeronautical broadband service, which includes a Hughes-designed antenna and modem that are compatible not only with Hughes’s satellites, but with other Ka-band and Ku-band spacecraft.
In a conference call with investors, EchoStar officials did not address whether they had advanced on plans to spend the $3 billion in cash on the company’s books.
Hughes President Pradman P. Kaul said the EchoStar-19 satellite, launched in December, is set to enter service in March with 220 Gbps of throughput capacity.
The new satellite will relieve the capacity crunch on EchoStar’s current Ka-band satellites to allow the company to resume subscriber growth, which has stagnated in recent months because the EchoStar 17/Jupiter 1 and Spaceway-3 satellites are filled to capacity.
The HughesNet Gen5 service associated with EchoStar 19 nonetheless will not offer markedly different subscriber packages than what’s available now. Kaul said prices would start at $49.99 per month for the entry-level plan offering 25 Mbps download, 2 Mbps upload and 10 gigabytes per month of total bandwidth.
Promised, versus actual, delivery
That is substantially lower than ViaSat’s plans for ViaSat-2, scheduled for launch in April and for service in the autumn.
EchoStar Chief Executive Michael T. Dugan, who by now is accustomed to Hughes’s role as the tortoise to ViaSat’s hare, said the race is won with consumer satisfaction.
“If we went back in history you’d look at ViaSat’s comments about what they were going to do with ViaSat-1 [ViaSat’s current broadband workhorse satellite] versus Jupiter 1, and the proof is in the pudding,” Dugan said. “We have been rated very well. We do the right thing for customers. I’m not worried about their announcements.”
Kaul said Hughes selected its subscriber plan of 25 Mbps/2Mbps to meet the broadband definition of the U.S. Federal Communications Commission (FCC).
“That is the benchmark,” Kaul said. “If the competition requires us to go more than 25, then Jupiter 2 can do it. At this stage we are consistently maintaining our market share of 60 percent of the U.S. consumer market and we hope to continue that leadership position.”
The HughesNet Gen5 service will include what Kaul referred to as “soft caps” on data, allowing customers to continue to use the service, at lower speeds and lower priority status, even after they have consumed their monthly allowance.
Kaul referenced the fact that, for the second year running, Hughes outperformed ViaSat in the annual FCC assessment of broadband providers. Hughes’s service was judged to consistently offer better-than-advertised performance. ViaSat advertises higher speeds, but falls short of their advertised goals more often than does Hughes.
Both companies have said they expect their ratings in the FCC survey — which both have said trends toward casting satellite broadband in a poor light — will improve with their new satellites. The latest FCC survey, called “Measuring Broadband America,” was based on 2015 data.
Where is Jupiter-3? Nowhere, for the moment
ViaSat is already working on a ViaSat-3 system, with an advertised 1Tbps of throughput, for 2019 and 2020 — one over the Americas, the second over Europe, the Middle East and Africa.
Kaul said Hughes was still weighing performance metrics and architectures for a HughesNet Gen6 but had not yet reached any conclusions. Kaul said he remained confident that the addressable market for satellite broadband in the United States, especially with the higher-throughput satellites, was about 9 million households.
Hughes reported 1.036 million subscribers to its consumer broadband service as of Dec. 31, about the same level as for the past year or two when stripping out the approximately 20,000 subscribers in Brazil. The company had hoped to reach 25,000 by Dec. 31.
Hughes has leased capacity on Eutelsat’s 65 West A satellite and expects to load up to 300,000 subscribers onto it as the service, which debuted in July 2016, grows in Brazil.
Hughes plans to launch is aeronautical broadband package for EchoStar 19/Jupiter 2 by September, using a dual-mode, Ku-/Ka-band terminal already in testing that can deliver 200 Mbps per aircraft. A dual-band antenna for the service is also in production.
EchoStar is scheduled to launch its EchoStar 23 C-/Ku-/S-band satellite over Brazil in March, assuming that launch-service provider SpaceX meets its latest schedule. The EchoStar 105/SES-11 satellite, also to launch on SpaceX, is now scheduled to launch this summer.
Seeking ‘harmonized’ European regulations on S-band ground system
The large EchoStar-21 satellite, an S-band spacecraft to provide mobile services in Europe, is awaiting the return to flight of Russia’s Proton rocket. Anders Johnson, president of EchoStar Satellite Services, was prudent in predicting a launch date, saying it should be by September.
EchoStar-21 is long past the European Commission’s December 2016 in-service deadline. Johnson said European governments understand that launch schedules are notoriously unreliable and have signaled they will not penalize EchoStar for the delay.
Licenses from each government are needed to operate the ground network that will assure service when users are not within the line of sight of the satellite.
Johnson was not clear on how many of the 28 governments of the European Union had granted a license for the EchoStar Mobile Ltd.’s service.
“We continue to discuss with the European Union, as well as the member states, what we refer to as a harmonization of the CGC [complementary ground component] regulations,” Johnson said. “Each member state generally has its own interpretation of exactly what our license permits, and what it doesn’t permit. That’s a conversation we continue to have.”
Peter B. de Selding