Anders N. Johnson. Credit: EchoStar

LONDON — Charlie Ergen’s S-band satellite strategy, which has featured terrestrial-spectrum-intended cash going in and little revenue coming out, now seems within sight of a business case with the purchase of Helios Wire Corp. of Canada and its Australian subsidiary, Sirion Global Pty.

Sirion, which like most other S-band satellite ventures has had more setbacks than successes, has global rights to S-band spectrum following a July decision by International Telecommunication Union (ITU) regulators to give Sirion a two-year extension, to April 2021, to start using is S-band spectrum reservation: http://bit.ly/32OapEz

The Ergen-owned EchoStar Corp. purchased Helios Wire for $26 million and is now investing what the company said is less than $10 million to launch a small S-band satellite in 2020 to “bring into use,” in ITU parlance, the Sirion-registered spectrum rights.

Sirion had planned a constellation of 28 satellites in low Earth orbit for IoT applications including the monitoring of livestock in Australia and fixed assets worldwide.

EchoStar is now picking up that business and will complement the smallsat constellation with the S-band payloads in geostationary orbit operated by EchoStar Mobile in Europe and Dish Network in the United States.

Ergen owns both EchoStar and Dish. Dish purchased an S-band satellite company called DBSD out of bankruptcy in 2011. Since then, the satellite has done little except depreciate.

In a Nov. 7 investor call, Anders N. Johnson, president of EchoStar Services and EchoStar’s chief strategy officer, whose main satellite capacity-lease business has been languishing for years, said EchoStar’s intention is to create a global S-band play with the Sirion, EchoStar and Dish assets.

“Sirion is another piece in the mosaic,” Johnson said, adding that the Australian company will allow EchoStar “to fill in gaps for a global solution in the [S-] band.”

Longer term, Johnson said the goal is to integrate the satellite S-band assets into the terrestrial 5G ecosystem. EchoStar added another piece to its S-band network by purchasing, for around 150 million Mexican pesos ($7.8 million).

Johnson said EchoStar already has a mobile satellite services license in Mexico and that the auction gives EchoStar rights to develop a terrestrial network in the same frequencies. EchoStar’s S-band assets in the United States and Europe also came with certain ground-based communications rights. U.S. and European regulators were persuaded that they could not get the private sector to operate an S-band satellite system without also offering a terrestrial wireless license, which is where the money is.

Whether EchoStar still views S-band only as a wedge into terrestrial play is uncertain. Johnson suggested the company believes that the IoT market has evolved to the point where a global satellite network, with ground sensors feeding data indiscriminately to GEO and LEO satellites, is a good business on its own.

“Helios gives us full [global] coverage from an MSS standpoint,” Johnson said. “CGC [complementary ground components, also known as ancillary terrestrial components] is an opportunity, but it is not the focus of our acquisition. The focus is a satellite network for GEO and NGSO,” or non-geostationary orbit.

The Siren S-band business will be run under the name of EchoStar Global Australia.

Hughes hit with Indian tax ruling that affects many telecom operators in India

EchoStar’s Hughes Network Systems, where EchoStar’s growth and profitability resides, reported revenue of $463.7 million for the three months ending Sept. 30,  up 4.2% from the same period a year ago.

Hughes EBITDA, at $155.9 million or 34% of revenue, was down from 37% a year ago in part because of an adverse Indian tax ruling that is affecting many telecommunications operators with business in India.

EchoStar Chief Financial Officer David J. Rayner said that the tax authority’s decision, which was validated by India’s Supreme Court, has an aggregate $13 billion impact on India’s telecommunications sector. The matter has now been taken up by a government cabinet committee that may decide to soften the impact.

This is not a new issue in India. Satellite operators the world over have been battling what they view as unusually harsh Indian regulatory decisions on what constitutes revenue taxable in India.

Hughes: Consumer satellite broadband subs up 5.6% since January; international now counts 192,000 subscribers

Outside the Indian tax issue, Hughes President Pradman P. Kaul said the company’s international consumer broadband business — meaning outside the United States and Canada — counted 192,000 subscribers as of Sept. 30.

With many of its beams now filled, Hughes’s consumer broadband growth in the United States will remain flat until the 2021 launch of the Jupiter 3 Ka-band broadband satellite, under construction by Maxar Technologies.

Hughes said its total consumer broadband subscriber count was 1.437 million as of Sept. 30, up a net 22,000 from June 30 and up 76,000 since Jan. 1.

For the moment, Hughes does not include rural Wi-Fi hotspot users in its subscriber count. Hughes has said that each Wi-Fi hotspot generates, on average, revenue equivalent to two U.S. subscribers: http://bit.ly/2kz7wXa

Kaul said Hughes is delivering gateway Earth stations for the OneWeb global broadband satellite constellation at “full pace.” The first few gateways have been delivered and “the technical performance is excellent,” Kaul said.

Hughes is operating under two OneWeb contracts with a total value of $300 million. Hughes invested around $50 million in OneWeb equity during OneWeb’s first round of fund-raising in June 2015.