Hughes Network Systems

Business Description

Hughes Network Systems (HNS) is the world’s largest provider of satellite-based private business networks, with an installed base of more than 350,000 very small aperture terminal (VSAT) systems in more than 85 countries. It is also a leading supplier of DIRECTV™ Receiver equipment and broadband terrestrial wireless access equipment. HNS pioneered the development of high-speed satellite Internet access services, which it markets under the DirecPC® and DIRECWAY™ brands. In 2000, HNS shipped its six millionth DIRECTV Receiver, generated revenues exceeding $1.4 billion and closed the year with a backlog of more than $1.2 billion—a 24-percent increase over 1999.

Key Strategies
• Lead HUGHES’ entry into next-generation broadband products and services
• Aggressively expand subscriber base for broadband-by-satellite Internet access
• Rapidly deploy DIRECWAY™ two-way broadband services
• Maximize sales through Powered By DIRECWAY/DirecPC® Internet access distribution agreements with DIRECTV, AOL, Pegasus, Earthlink, Juno and other strategic partners
• Increase service focus; introduce new multimedia value-added services—such as interactive distance learning, micro-advertising and high-speed corporate Internet/intranet access—for DIRECWAY enterprise customers globally
• Continue development of Spaceway™, the next-generation broadband satellite platform, which is scheduled to begin service as early as 2003

Major Accomplishments

• Established DIRECWAY/DirecPC marketing agreements with DIRECTV, Earthlink, Juno and Pegasus, thus securing distribution through the largest U.S. satellite television service and three of the four largest Internet service providers. This expanded the product’s market access to a combined base of over 45 million existing U.S. subscribers of television and Internet services
• Launched AOL Plus Powered by DirecPC®
• Ended year with over 50,000 U.S. DirecPC customers
• Began shipping award-winning two-way broadband satellite terminals to consumer and small office/home office (SOHO) markets
• Shipped more than three million DIRECTV Receivers, bringing total number to more than six million
• Increased backlog of VSAT enterprise customers by 24 percent over 1999
• Signed a five-year VSAT network services agreement with ExxonMobil for approximately 14,000 gas stations
• Increased restaurant sector penetration with wins at Jack-in-the-Box, Outback Steakhouse and Donatos
• Captured major international contracts with Visa International in the Americas; Lawson’s convenience stores in Japan; ChinaCast, China Radio and Worthop in China; United Screens and Community Media in Germany; Healthtrack in the United Kingdom; and Banco do Brasil in Brazil