WASHINGTON — Hughes Network Systems and Yahsat extended their consumer-broadband partnership to Brazil, where the two companies offer a combined 65 Gbps of capacity to 95% of the Brazilian population.
The agreement to create a joint venture for Brazilian broadband comes eight months after the two companies created a JV for broadband deployment in Africa and western Asia.
Hughes invested $100 million in cash for a 20% stake in that JV, into which United Arab Emirates-based Yahsat put its Al Yah 2 and Al Yah 3 satellites: http://bit.ly/2ZSbyti
For Brazil, both companies will be contributing orbital assets. The ownership of the JV will be 80% Hughes, 20% Yahsat, the two companies said. There will be no cash consideration in the transaction.
Hughes, which in mid-2018 reported more than 100,000 broadband subscribers in Brazil, has Ka-band payloads on the Eutelsat 65 West A satellite and Telesat Canada’s Telstar 19V, at 63 degrees West. Hughes entered into 15-year leases for capacity on both satellites.
Hughes is scheduled to launch its 500-Gbps Jupiter 3/EchoStar 24 satellite in 24 to add to the capacity available over Brazil.
Yahsat’s Al Yah 3 satellite, launched in January 2018, operates from 20 degrees West. Placed into a bad orbit by the Arianespace Ariane 5 rocket, Al Yah 3 used a large part of its fuel to migrate to its intended position. That cost the satellite an estimated 40% of its service life. Yahsat received a claim of about $108 million.
As well-funded players in what is generally viewed as an overcrowded satellite broadband market, Hughes and Yahsat have multiple avenues for cooperation depending on how they see the future, and not just in Ka-band broadband.
Hughes’s parent company, EchoStar, in 2018 attempted to purchase mobile satellite services provider Inmarsat of London, which has an orbital fleet carrying heritage narrowband L-band capacity and both civil and military Ka-band for broadband.
Yahsat owns L-band mobile satellite services provider Thuraya, whose current geostationary-orbit satellites are aging. It remains unclear how Yahsat intends to monetize the asset in the medium-term.
Hughes and Yahsat did not immediately disclose how much each owns of the Brazilian JV, and whether Yahsat is putting in any cash given Hughes’s existing presence in the market and its larger satellite capacity over Brazil.
“Yahsat is the logical partner for Hughes in Brazil as we continue to expand our services and meet growing demand across consumer, enterprise and carrier markets,” Hughes President Pradman P. Kaul said in a May 6 statement. “Brazilians throughout the country will benefit from the capacity, scale and operational synergies of our combined entity as we connect the unconnected and enable businesses and communities to thrive.”
Yahsat Chief Executive Masood M. Sharif Mahmood said: “Our partnership with Hughes supports Yahsat’s mission to enable social and economic development by empowering communities in remote regions with high-performance broadband connectivity,” Yahsat Chief Executive Masood M. Sharif Mahmood said in a May 6 statement. “We now look forward to combining our efforts to unlock the massive potential of the largest and most exciting economy in Latin America.”