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Winter 2007<br />

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Riding the Wave<br />

of <strong><strong>Hughes</strong>Net</strong><br />

<strong>Managed</strong> <strong>Network</strong><br />

<strong>Services</strong><br />

Executive Corner<br />

All <strong>Systems</strong> on<br />

Track<br />

<strong>Hughes</strong> Financial<br />

Corner<br />

Education: Going<br />

the Distance to<br />

the Amazon<br />

The Next Video<br />

Revolution<br />

Breaking News<br />

with BGAN<br />

Setting the Course<br />

for Maritime<br />

Broadband<br />

The Inside View<br />

Broadband Across<br />

America<br />

Executive Corner<br />

Cont.<br />

Riding the Wave<br />

of <strong><strong>Hughes</strong>Net</strong><br />

<strong>Managed</strong> <strong>Network</strong><br />

<strong>Services</strong> Cont.<br />

<strong>Hughes</strong><br />

QuickTakes<br />

Riding the Wave of<br />

<strong><strong>Hughes</strong>Net</strong> <strong>Managed</strong><br />

<strong>Network</strong> <strong>Services</strong><br />

The recent announcement of a multi-year contract with U.K. lottery operator<br />

Camelot Group plc has now positioned <strong>Hughes</strong> as a leading provider of<br />

managed services in Europe, expanding beyond its earlier major wins in<br />

North America.<br />

Under the Camelot contract, the continent-wide <strong><strong>Hughes</strong>Net</strong> broadband satellite<br />

service will be utilized to provide a comprehensive, highly reliable VPN solution<br />

connecting more than 27,000 lottery sites throughout the U.K. <strong>Hughes</strong> satellite<br />

terminals will interface with Camelot’s lottery equipment at each site, including<br />

point-of-sale digital media screens used to display a wide range of announcements,<br />

such as jackpots, local information, and missing-person alerts. The multi-year deal for<br />

<strong>Hughes</strong> includes provisioning of all networking equipment, installation, maintenance,<br />

and ongoing support.<br />

“The highly secure and reliable <strong><strong>Hughes</strong>Net</strong> VPN service was an important element in<br />

our bid for the new lottery license,” said Neil Kellar, Camelot’s IT Director. “<strong>Hughes</strong>’<br />

Details on Page 12<br />

continued on page 11<br />

A P u b l i c a t i o n o f<br />

Executive Corner<br />

2007 in Review:<br />

From NASDAQ to<br />

SPACEWAY<br />

By Pradman Kaul, Chairman<br />

and CEO, <strong>Hughes</strong><br />

It was a<br />

blustery day<br />

in New York’s<br />

Times Square,<br />

but January 18,<br />

2007 brought<br />

the <strong>Hughes</strong><br />

team a rare,<br />

warming experience—ringing<br />

the closing bell of the NASDAQ<br />

Stock Market. This event not only<br />

celebrated our company’s listing<br />

on the NASDAQ last year; it also<br />

served as a symbol of all we have<br />

accomplished and where we are<br />

headed.<br />

So how have we done? Since<br />

January, <strong>Hughes</strong> stock has<br />

increased nearly 35 percent, the<br />

company is poised to pass the<br />

$1 billion revenue milestone, and<br />

we’ve had positive results for seven<br />

consecutive financial quarters.<br />

By any financial measure—cash,<br />

profitability, revenue, growth—<br />

<strong>Hughes</strong> has met or exceeded all<br />

expectations.<br />

These kinds of results don’t happen<br />

by accident. We have an incredible<br />

team executing a proven business<br />

strategy—which is to leverage<br />

our rapidly growing broadband<br />

service business from a continuing<br />

strong base of technology and<br />

product innovations. And we’re<br />

not averse to selectively pursuing<br />

continued on page 10


All <strong>Systems</strong> on Track<br />

A SPACEWAY Update<br />

On August 14, 2007, the <strong>Hughes</strong>-owned SPACEWAY 3 satellite, the<br />

world’s first to employ onboard switching and routing capability,<br />

was successfully lifted into space by Arianespace from the European<br />

Teleport in Kourou, French Guiana. As of mid-December, Boeing has<br />

completed its placement into a geostationary orbit approximately<br />

22,300 miles above the equator at 95o West longitude, and it has been<br />

handed over to <strong>Hughes</strong> to conduct over-the-air testing in preparation<br />

for service delivery.<br />

All systems are on track for this next-generation, Ka-band broadband<br />

satellite system to begin delivering <strong><strong>Hughes</strong>Net</strong> broadband services to<br />

enterprise, consumer, and government customers throughout North<br />

America in the first quarter of 2008. Look for more information about<br />

SPACEWAY in the next issue of Channels in early 2008.<br />

<strong>Hughes</strong> Financial Corner<br />

Ticker: HUGH (NASDAQ)<br />

<strong>Hughes</strong> third-quarter 2007 results were<br />

announced on November 7, followed by an<br />

earnings conference call hosted on November 8.<br />

An audio replay of the earnings call is available<br />

on www.hughes.com. Select the link to Investor<br />

Relations.<br />

Snapshot of <strong>Hughes</strong> Third-Quarter<br />

2007 Results<br />

Revenues increased 11.5 percent over third<br />

quarter of 2006 to $234 million<br />

EBITDA increased by 6 percent to $35 million<br />

Net income increased to a strong<br />

$12.4 million<br />

Analyst Day<br />

On September 24, <strong>Hughes</strong> hosted an Analyst Day<br />

with 18 sell-side research analysts in attendance.<br />

The agenda included presentations by Pradman<br />

Kaul, Grant Barber, Adrian Morris, Mike Cook,<br />

Arunas Slekys, and Matthew Mohebbi, and<br />

Channels / Winter 2007 / www.hughes.com<br />

concluded with a tour of the network operations<br />

center (NOC) conducted by Dave Zatloukal.<br />

Media Interviews<br />

CNBC Interview with CEO Pradman Kaul<br />

In August, just after the launch of SPACEWAY,<br />

CNBC Squawk Box interviewed <strong>Hughes</strong> CEO<br />

Pradman Kaul to get his insight into the launch<br />

of the next-generation satellite and what it<br />

means to the future of satellite broadband.<br />

Wall Street Transcript Interview<br />

with CFO Grant Barber<br />

In September, the Wall Street Transcript<br />

interviewed <strong>Hughes</strong> CFO Grant Barber who<br />

shared his perspective on <strong>Hughes</strong>’ market<br />

leadership, growth, and strategy.<br />

To see interview videos, read transcripts, and<br />

get the most up-to-date news and financial<br />

information, visit www.hughes.com and select<br />

the link to Investor Relations.<br />

Published quarterly by <strong>Hughes</strong> Corporate<br />

Communications Department<br />

Eric Gann, Editor<br />

Channels may also be found online at<br />

www.hughes.com. Click on News &<br />

Events and select Channels Newsletter.<br />

Correspondence is invited and should be<br />

directed to:<br />

Arunas Slekys, Vice President,<br />

Corporate Marketing<br />

E-mail: aslekys@hns.com<br />

Telephone: 301-428-5502<br />

Fax: 301-601-4107<br />

<strong>Hughes</strong><br />

11717 Exploration Lane<br />

Germantown, MD 20876 USA<br />

About <strong>Hughes</strong><br />

<strong>Hughes</strong> <strong>Network</strong> <strong>Systems</strong>, LLC (HUGHES)<br />

is the global leader in providing broadband<br />

satellite networks and services for large<br />

enterprises, governments, small businesses,<br />

and consumers. <strong><strong>Hughes</strong>Net</strong> encompasses<br />

all broadband solutions and managed<br />

services from <strong>Hughes</strong>, bridging the best of<br />

satellite and terrestrial technologies. To<br />

date, <strong>Hughes</strong> has shipped more than<br />

1.2 million systems to customers in over<br />

100 countries. Its broadband satellite<br />

products are based on the IPoS (IP over<br />

Satellite) global standard, approved by the<br />

TIA, ETSI, and ITU standards organizations.<br />

Headquartered outside Washington, D.C.,<br />

in Germantown, Maryland, USA, <strong>Hughes</strong><br />

maintains sales and support offices<br />

worldwide. <strong>Hughes</strong> is a wholly owned<br />

subsidiary of <strong>Hughes</strong> Communications,<br />

Inc. (NASDAQ: HUGH). For additional<br />

information, please visit www.hughes.com.<br />

Special thanks to our contributors: Mary<br />

Belt, Kathy Bell, Judy Blake, Keary Cannon,<br />

Simon Cockayne, Deepak Dutt, Ann<br />

Edgeington, Eric Gann, Rafael Guimarães,<br />

Jaclyn Joines, Bill Lindsay, Doug Medina,<br />

Nancy Merette, Glenn Mossy, Amanda<br />

Palmer, Rob Shultz, Tim Tang, Arunas<br />

Slekys, and Mike Wade.<br />

©2007 <strong>Hughes</strong> <strong>Network</strong> <strong>Systems</strong>, LLC.<br />

All Rights Reserved. <strong>Hughes</strong>, <strong><strong>Hughes</strong>Net</strong>,<br />

AIReach, and SPACEWAY are trademarks<br />

of <strong>Hughes</strong> <strong>Network</strong> <strong>Systems</strong>, LLC.<br />

Wal-Mart is a registered trademark<br />

of Wal-Mart Stores, Inc.


EDUCATION:<br />

Going the Distance<br />

to the Amazon<br />

Students in the Brazilian State of Amazonas are now learning<br />

their lessons via educational programs that go the distance—by<br />

satellite. The Amazonas Board of Education is using <strong><strong>Hughes</strong>Net</strong><br />

broadband satellite service to deliver programs under the “On-Site<br />

Middle School with Technology Mediation” project to 10,000 students<br />

in rural communities. The program is designed to reach students who<br />

do not have access to a middle school, as well as those at schools that<br />

lack the space to accommodate them.<br />

At the Educational Media Center of Amazonas in Manaus, specially<br />

trained teachers deliver classes that are transmitted in real time to<br />

the <strong>Hughes</strong>-operated network operations center, and then broadcast<br />

to students in rural communities in 42 municipalities. Through the<br />

interactive IPTV system, students report to the teachers in Manaus,<br />

ask questions, and receive real-time feedback, assisted by 260 on-site<br />

teachers. Utilizing the <strong><strong>Hughes</strong>Net</strong> two-way satellite service, students<br />

and teachers interact as though they were physically present at the<br />

same location.<br />

Each classroom features<br />

a technology kit that<br />

includes a <strong>Hughes</strong> HN<br />

broadband satellite<br />

terminal, multimedia PC,<br />

LCD TV, laser printer, and<br />

special battery in case of<br />

power outages.<br />

According to Delio Morais, president of <strong>Hughes</strong> <strong>Network</strong> <strong>Systems</strong><br />

Americas, “Many of Brazil’s citizens live in remote areas with little<br />

opportunity for education. With this novel <strong><strong>Hughes</strong>Net</strong> distance<br />

education solution, we are able to overcome the obstacle of<br />

geography and deliver education to students wherever they live,<br />

even in remote parts of the Amazonas.”<br />

“Our greatest challenge was in accessing rural communities in the<br />

Amazonian jungle to install the satellite equipment,” added Morais.<br />

“Crews and installation materials traveled larger rivers by ship,<br />

and then transferred to smaller boats that were able to navigate<br />

the local rivers. But these challenges are far overshadowed by the<br />

importance of bringing education to the teenagers and adults in<br />

more than 200 communities in Amazonas who will benefit from<br />

this project.”<br />

Channels / Winter 2007 / www.hughes.com


The Next Video Revolution<br />

Advances in Consumer Television Create New Opportunities for the Enterprise<br />

In San Francisco, California, the CEO of a mid-sized company<br />

delivers a vision of the future. Employees in Kansas, Florida,<br />

Virginia, and Montreal watch the presentation in real time on<br />

high-definition TV monitors, PCs, and laptops, while some catch it<br />

on their cell phones. London and Munich employees will view a<br />

digitally recorded version when they start their workday tomorrow.<br />

The world of video is changing dramatically. No longer limited to the<br />

realm of the analog television set at home, video is available almost<br />

everywhere and on a myriad of devices—iPods, cell phones, digital<br />

video recorders (DVRs), PCs, and laptops. High-definition, DVDs, home<br />

Channels / Winter 2007 / www.hughes.com<br />

theater systems, digital surround sound—all aspects of digital audio/<br />

video technology—have dramatically raised the quality and sensory<br />

experience we now expect. And just as the black and white TVs of<br />

our parents gave way to color sets some 40 years ago, so will analog<br />

television broadcasting officially give way to the world of all-digital<br />

television broadcasting by February 2009.<br />

The same technology evolution that has powered the widespread<br />

adoption of digital video for the consumer is also driving dramatic<br />

changes in enterprise markets. Once solely the venue of large<br />

broadcast networks, private television broadcasting has now become<br />

available and affordable to any business, large or small. Furthermore,<br />

advances in video encoding and compression such as MPEG4, along<br />

with transmission/modulation advances such as DVB-S2, have<br />

significantly reduced bandwidth requirements by as much as<br />

60 percent.<br />

The availability of private television broadcasting solutions, coupled<br />

with today’s multimedia-savvy workforce, means that business IPTV is<br />

attracting considerable corporate interest as a tool to communicate<br />

with employees, improve training, satisfy compliance requirements,<br />

and reduce travel costs. Today’s knowledge-based era recognizes<br />

employee talent as a new basis by which companies compete. Better<br />

trained employees represent a strategic advantage, and distance<br />

education using the latest audio/video technologies and broadband


networks is the most costeffective<br />

means to achieve<br />

it. But many companies<br />

are neither equipped nor<br />

knowledgeable enough<br />

when it comes to the<br />

resources and experience<br />

required to operate such a<br />

private television network.<br />

<strong>Hughes</strong> is helping to meet<br />

that challenge. Drawing<br />

on decades of experience<br />

in delivering and managing<br />

broadband networks<br />

and services, <strong>Hughes</strong> has<br />

adapted the latest IPTV<br />

technologies, solutions,<br />

and best practices to<br />

enable businesses to gain the benefits of a private IP video network.<br />

<strong><strong>Hughes</strong>Net</strong> Business IPTV delivers multimedia communications in<br />

packages designed specifically for the enterprise. In addition to standalone<br />

video network offerings, <strong>Hughes</strong> provides cost-effective options<br />

for enhancing existing private data networks, such as frame relay and<br />

MPLS, to support video applications.<br />

Regardless of the number or types of applications supported,<br />

<strong><strong>Hughes</strong>Net</strong> offers enterprises the option to outsource the complexity<br />

of running a private television network wholly or in part. <strong><strong>Hughes</strong>Net</strong><br />

also provides ancillary services such as content usage reporting, which<br />

enables a business to demonstrate compliance with an audit trail<br />

proving that its workforce has taken a particular type of training to<br />

comply with corporate or legal regulations.<br />

<strong><strong>Hughes</strong>Net</strong> Business IPTV supports a range of uses such as live video<br />

streaming, video on demand, and content pre-population. Enterprise<br />

DVRs enable companies to record content for on-demand playback at<br />

a later time. Such convenient access to training material dramatically<br />

increases the penetration of mission-critical knowledge throughout<br />

an organization. Further improving the return on investment,<br />

<strong><strong>Hughes</strong>Net</strong> Business IPTV can also support access continuity require-<br />

ments and digital signage initiatives in addition to training and<br />

corporate communications. Scalable to large and small audiences,<br />

the <strong><strong>Hughes</strong>Net</strong> Business IPTV solution includes everything from<br />

design, integration, and installation to maintenance, operations,<br />

and customer support.<br />

“<strong><strong>Hughes</strong>Net</strong> Business IPTV is creating new excitement as a cost-effective<br />

vehicle for distance learning and corporate communications,”<br />

said Sampath Ramaswami, senior director of services development<br />

and marketing of <strong>Hughes</strong> North America. “Its performance and<br />

flexibility also make it an important part of a corporate strategy to<br />

maintain a well-trained workforce for true competitive advantage.”<br />

That means more employees in more companies will be watching<br />

more TV—as part of the job.<br />

Breaking News<br />

with BGAN<br />

A Channels Update<br />

Award-winning<br />

CNN Digital<br />

Newsgathering Project<br />

In the Summer 2007 issue, Channels published a story<br />

called “Breaking News with BGAN” about <strong>Hughes</strong> and<br />

Streambox technology that enables reporters to deliver<br />

streaming news as events unfold with battery-powered<br />

equipment that fits into a small backpack.<br />

Since that article was published,<br />

CNN was recognized by IBC, an<br />

organization dedicated to the<br />

creation, management, and<br />

delivery of content, for its<br />

groundbreaking use of such<br />

technology. CNN’s coverage of<br />

the Israeli-Hezbollah conflict in<br />

Breaking<br />

News with<br />

BGAN<br />

<strong>Hughes</strong> and Streambox Make<br />

Headlines with Real-Time<br />

Newsgathering Solution<br />

o matter how they get their news reports, today’s<br />

television and Internet audiences demand high-quality<br />

video, sharp images, and up-to-the-minute reporting. In Nthe<br />

past, this has posed unique challenges when covering<br />

emergencies or reporting from far-flung regions, including war zones<br />

such as Iraq and Afghanistan. Hauling, setting up, and then breaking<br />

down a considerable amount of equipment, often in difficult terrain<br />

and severe conditions, makes it particularly challenging to report from<br />

remote locations.<br />

But innovative technology is now enabling live news feeds from The latest generation <strong>Hughes</strong> 9250 terminal will introduce a whole new<br />

almost anywhere in the world. In 2005, the introduction of Inmarsat’s level of high-speed mobile communications with multi-user capability<br />

broadband global area network (BGAN) facilitated connectivity and rates of over 464 Kbps—while on the move.<br />

to more than 80 percent of the world’s population and land mass<br />

via powerful mobile satellite modems. And today, technology from “The key to a successful news organization is up-to-the-minute,<br />

<strong>Hughes</strong> and Streambox, means a single reporter can deliver streaming high-quality reporting, including images and video,” said Graham<br />

news as events unfold—with battery-powered equipment that fits into Avis, vice president of <strong>Hughes</strong> Mobile Satellite Terminal Group. “The<br />

a small backpack.<br />

<strong>Hughes</strong>/Streambox solution enables media companies to stream live,<br />

Channels / Summer 2007 / www.hughes.com<br />

The <strong>Hughes</strong>/Streambox solution, utilizing the global BGAN satellite<br />

high-quality feeds that tell,<br />

service, streamlines the process of live media feeds, even from the most<br />

and more importantly, show<br />

RepoRtiNg Live<br />

remote locations, without the need for a truck full of equipment. In<br />

news audiences what is<br />

Direct from Detroit’s Regatta<br />

a typical scenario, a major news organization equips a reporter with<br />

happening in the world—as<br />

Race on Lake Huron<br />

a video camera, a Streambox® portable encoder, and a <strong>Hughes</strong> BGAN<br />

it happens.”<br />

portable terminal.<br />

Broadcasting live from the middle of Lake<br />

Huron, WDIV Detroit, a Post-Newsweek “Because the Streambox<br />

The Streambox technology encodes and decodes video footage in<br />

affiliate, used the <strong>Hughes</strong> BGAN 9201/ and <strong>Hughes</strong> technologies<br />

real time. Using highly-efficient compression, Streambox equipment<br />

Streambox solution to cover the 2007 work together hand-in-<br />

provides superior video quality at low data rates over BGAN and other IP<br />

Bayview Mackinac Yacht Race, which glove, our customers are<br />

networks. Combining the Streambox equipment with the <strong>Hughes</strong> 9201<br />

attracted more than 250 competing yachts.<br />

able to streamline their<br />

BGAN terminal yields much higher bandwidth and transmission speeds<br />

mobile newsgathering<br />

than previous mobile satellite technology—up to 256 Kbps streaming<br />

process for real-time video<br />

video on a dedicated channel, similar to that of a videoconference. In<br />

transport from remote locations,” said Bob Hildeman, chairman and<br />

fact, when two <strong>Hughes</strong> 9201 terminals are bonded together and used<br />

CEO of Streambox. “The integrated <strong>Hughes</strong>/Streambox solution is a vital<br />

with Streambox encoders, a reporter can stream news reports at speeds<br />

tool for news organizations delivering breaking news over low data rate<br />

approaching 500 Kbps.<br />

networks.”<br />

In addition to its use in newsgathering applications, the <strong>Hughes</strong>/<br />

Streambox solution is also ideal for emergency response and assessment,<br />

military operations, and government and enterprise applications.<br />

In today’s world of ubiquitous information, <strong>Hughes</strong> and Streambox are<br />

helping reporters, camera crews, and media companies deliver highquality<br />

reporting, images, and video news from around the globe—<br />

whenever and wherever the stories unfold.<br />

July 2006 using a BGAN terminal from <strong>Hughes</strong> and technology<br />

from other partners, including Streambox and Inmarsat, created<br />

a breakthrough in newsgathering technology. Using small<br />

IP-based Internet connections coupled with satellite uplinks,<br />

hundreds of journalists were able to file on-scene live reports.<br />

CNN’s Digital Newsgathering (DNG) project is the first complete<br />

newsgathering tool that works over any existing IP<br />

infrastructure.<br />

CNN received the Innovation Award in the content creation<br />

category at the annual IBC Awards Ceremony in September<br />

in Amsterdam, as well as the coveted Judges’ Prize, for its<br />

innovative DNG. The IBC Innovation Awards celebrate excellence<br />

in the creation of technical and operational solutions, with<br />

entries submitted simultaneously by both technical suppliers<br />

and end users for solutions that demonstrate meeting<br />

real-world needs.<br />

Channels / Winter 2007 / www.hughes.com<br />

<strong>Hughes</strong> Takes<br />

‘Workplace Excellence’ and<br />

‘Wellness Trailblazer’ Awards<br />

or the seventh consecutive year,<br />

F<strong>Hughes</strong> has been awarded the<br />

‘Workplace Excellence’ Seal of Approval<br />

from the Alliance for Workplace<br />

Excellence. In addition, the company<br />

received the ‘Wellness Trailblazer’ award<br />

for the first time. Both awards are given<br />

to members of the Maryland business<br />

community dedicated to establishing a<br />

workplace culture that allows employees<br />

to achieve success at work, at home, and<br />

in the community. The awards were<br />

created to recognize visionary employers<br />

that are paving the way to a workplace<br />

where people can experience professional<br />

fulfillment and success, and personal<br />

wellness.<br />

“<strong>Hughes</strong> is honored to be the recipient<br />

of the Workplace Excellence Seal of<br />

Approval for the seventh year in a row<br />

and to be a first-time recipient of the<br />

Wellness Trailblazer award,” said Pradman<br />

Kaul, chairman and CEO of <strong>Hughes</strong>.<br />

“Achieving a healthy work-life balance is<br />

a cornerstone of the <strong>Hughes</strong> culture and<br />

a true win-win scenario. The company<br />

invests in the environment and in<br />

programs that enable employees to<br />

prioritize their time and energies, with<br />

access to all the facilities and resources<br />

they need to succeed at work, at home,<br />

and within the community.”<br />

Channels / Summer 2007 / www.hughes.com


M<br />

aritime—it’s an industry that evokes<br />

images of great ships traveling far<br />

out on the high seas for months<br />

at a time. But much of the maritime industry<br />

actually consists of merchant ships and private<br />

yachts that operate in regional waters. Millions<br />

of cargo ships, tankers, fishing boats, cruise<br />

ships, yachts, and patrol vessels travel closer<br />

to shore and mostly from port to port rather<br />

than across oceans. In the past, owners, guests,<br />

and crews onboard these vessels couldn’t<br />

access e-mail, browse the Internet, or conduct<br />

online business with consistent broadband<br />

connectivity in this wet, choppy environment.<br />

But now with the help of <strong>Hughes</strong> technology, a Cyprus-based<br />

telecommunications service provider is solving that challenge. Global<br />

Marine Communications (GMC) recently launched its new satellite<br />

Channels / Winter 2007 / www.hughes.com<br />

Setting the CourSe for<br />

service for the maritime industry, delivering<br />

affordable high-speed Internet access, Voice over<br />

IP (VoIP), and data communications services in<br />

the Mediterranean and North Seas, including<br />

Europe, the Middle East, and northern Africa.<br />

In addition, GMC roaming service plans are<br />

available that extend coverage to North America,<br />

the Caribbean Sea, and Australia.<br />

The GMC communications solution combines<br />

the <strong>Hughes</strong> HN series satellite broadband system<br />

and <strong><strong>Hughes</strong>Net</strong> broadband satellite service<br />

over Ku-band satellites. Fully compliant with<br />

the IPoS/DVB-S2 satellite standard, including<br />

Adaptive Coding & Modulation (ACM), this solution enables high<br />

throughput using Ku-band antenna sizes smaller than previously<br />

possible on vessels. The compact, gyroscopic stabilized satellite antenna<br />

was specifically engineered for the harsh marine environment by


Orbit Marine, a leading designer and manufacturer of marine-stabilized<br />

satellite communications antennas. GMC also offers technical support,<br />

design, installation, and integration services to its marine customers.<br />

GMC’s new service offers cost-effective voice and data communications<br />

in several convenient monthly service packages for different speed and<br />

usage requirements. When traveling across oceans, vessels can rely on<br />

a variety of Inmarsat services and switch to the GMC service in regional<br />

waters. In the future, GMC plans to add network operations centers<br />

to expand availability in new service regions and to collaborate with<br />

operators in South America and Asia to provide global coverage.<br />

“Onboard Internet is a necessity for ship owners today,” said Keary<br />

Cannon, vice president of marketing and sales for <strong>Hughes</strong> Europe. “It<br />

is much easier to lease and get crews for vessels that have always-on<br />

broadband access, rather than a system with per-minute charges and<br />

low data rates. Not only does a <strong>Hughes</strong> satellite terminal with the Orbit<br />

stabilized antenna provide affordable broadband access at download<br />

speeds of 2 Mbps or higher, but GMC can also offer a variety of dedicated<br />

or shared bandwidth options using <strong><strong>Hughes</strong>Net</strong> Ku-band coverage.”<br />

“This service meets an exploding demand for consistent coverage in<br />

coastal areas,” said Alex Ekonomou, technical director, Global Marine<br />

Communications. “In addition to the wealth of satellite communications<br />

expertise, equipment, and services that <strong>Hughes</strong> brings, the Orbit antenna<br />

is a marvelous work of engineering that enables a highly reliable service<br />

in this harsh, wet, salty, and mobile environment.”<br />

The new GMC service is also ideal for the oil and gas sector, which is<br />

increasingly using broadband satellite technology for both day-to-day<br />

operations and for reliable backup services on offshore platforms.<br />

As the maritime industry continues to grow, the people who travel,<br />

work, and live on board can remain confident that their communications<br />

will stay anchored via satellite, even while they move freely across the<br />

seven seas.<br />

Channels / Winter 2007 / www.hughes.com


Channels / Winter 2007 / www.hughes.com<br />

The<br />

Inside<br />

View<br />

<strong>Network</strong> managers have a tough<br />

job. These busy IT professionals<br />

are responsible for keeping<br />

track of everything that goes<br />

on in their networks around the clock—and<br />

sometimes around the world. That’s why the<br />

<strong><strong>Hughes</strong>Net</strong> Customer Gateway is good news<br />

for enterprises.<br />

Providing a single interface for monitoring<br />

and managing an organization’s satellite<br />

and landline broadband technology is the<br />

critical role of the <strong><strong>Hughes</strong>Net</strong> Customer<br />

Gateway. Enterprise customers utilize this<br />

important tool to keep track of network<br />

activity and reduce the time and challenges<br />

associated with monitoring multiple<br />

systems. Through a secure Web login via<br />

the <strong>Network</strong> Management Portal, enterprise<br />

help desks and network administrators can<br />

access an immediate snapshot of real-time<br />

network status and view applications<br />

and performance at any site. Site-bysite<br />

analysis, trend data, and extensive<br />

troubleshooting functionality also help<br />

network administrators understand and<br />

improve application performance.<br />

In Johnson City, Tennessee, Alliance Data,<br />

a leading provider of marketing, loyalty,<br />

and transaction services in North America,<br />

tracks nearly 5,000 <strong>Hughes</strong> VSATs that serve<br />

over 120 million consumer relationships.<br />

“The <strong><strong>Hughes</strong>Net</strong> Customer Gateway is a<br />

valuable tool in running our business,” said<br />

Chris Adcock, operations technical specialist,<br />

Alliance Data. “Alliance processes billions of<br />

transactions each year, and access to critical<br />

information enables us to understand exactly<br />

what’s going on in the network.”


“The <strong><strong>Hughes</strong>Net</strong> Customer<br />

Gateway helps support our<br />

one call-resolution policy for<br />

customers. It’s a tremendous<br />

timesaver and productivity tool.”<br />

– Chris Adcock, Alliance Data<br />

Here is a look at some of the Customer<br />

Gateway features that make the jobs of<br />

enterprise IT professionals and <strong><strong>Hughes</strong>Net</strong><br />

resellers easier.<br />

Installation<br />

When customers order equipment from<br />

<strong>Hughes</strong>, they can monitor every step of the<br />

process through the Customer Gateway—<br />

from initial contact to site commissioning.<br />

“A color-coded calendar tool helps us<br />

easily track installation progress, drill down<br />

to detailed information, and keep sites<br />

informed,” said Adcock. “This is especially<br />

important when we’re deploying a large<br />

number of sites for our customers.”<br />

Documents and Technical Information<br />

Documents and Technical Information<br />

provide standard monthly reports, including<br />

availability and outage information for<br />

network, hub, and remote sites. A documentation<br />

library furnishes comprehensive<br />

information such as manuals and a knowledge<br />

base that provides troubleshooting<br />

steps. According to Adcock, “Reports give<br />

us important data on network availability<br />

and utilization, and also help us ensure that<br />

we’re meeting the service level agreements<br />

that we’ve set for our customers. And the<br />

technical library is an invaluable resource for<br />

developing internal procedures.”<br />

Trouble Tickets<br />

<strong>Hughes</strong>-generated trouble tickets on the<br />

Customer Gateway alert customers of network<br />

events that impact their sites. Likewise,<br />

enterprise help desks use the Customer<br />

Gateway to generate site-related tickets.<br />

<strong>Network</strong> Management Portal<br />

The <strong>Network</strong> Management Portal enables<br />

enterprises to look beyond sites to the<br />

network as a whole. Fault Management<br />

provides a view of attributes that could<br />

impact a site and its performance, enabling<br />

early detection of problems and faster<br />

resolution of network issues. Pie charts, bar<br />

charts, and maps display information such as<br />

network availability, site problems, weatherrelated<br />

events, and ongoing issues.<br />

The Performance Management function of<br />

the portal provides deep network visibility<br />

with historical and real-time reports at site,<br />

network, and application levels. Enterprises<br />

can view usage information such as top<br />

applications, top hosts, and related statistics<br />

to gain better insight into the network and<br />

the ability to conduct analysis to improve<br />

performance.<br />

Managing the <strong>Network</strong> Environment<br />

“Because all the information we need is<br />

right there at our fingertips, the <strong><strong>Hughes</strong>Net</strong><br />

Customer Gateway helps support our one<br />

call-resolution policy for customers,” added<br />

Adcock. “It’s a tremendous timesaver and<br />

productivity tool for us.”<br />

“The <strong><strong>Hughes</strong>Net</strong> Customer Gateway gives<br />

enterprises the productivity, planning<br />

tools, and information they need to better<br />

manage their network environments,” said<br />

Douglas Medina, senior director of enterprise<br />

marketing North America, <strong>Hughes</strong>. “This<br />

helps our customers achieve greater uptime,<br />

optimal application performance, and faster<br />

recovery after outages—for a true competitive<br />

advantage in the marketplace.”<br />

Broadband Across America<br />

As Close as Your Local<br />

It’s clear that broadband Internet access is changing the way many people work, live, and<br />

play. But millions of American households and small businesses aren’t served by terrestrial<br />

broadband cable or DSL, a divide that is fueling the rapid growth of high-speed Internet<br />

access by satellite. And now, getting the benefits of broadband can be as easy as shopping<br />

at your local Wal-Mart.<br />

Consumers and small businesses across North America can now purchase <strong><strong>Hughes</strong>Net</strong>, the<br />

leading satellite broadband Internet access service, at 2,800 Wal-Mart stores across the U.S.,<br />

with the convenience of signing up when they shop. <strong><strong>Hughes</strong>Net</strong> is available to everyone<br />

in the continental U.S. with a view of the southern sky, and offering it at Wal-Mart stores<br />

where millions of people shop makes broadband more accessible in more regions of the<br />

country than ever before.<br />

“Wal-Mart is perhaps the only retail store in the country that reaches as many people as<br />

<strong><strong>Hughes</strong>Net</strong>,” said Mike Cook, senior vice president, North America Division, <strong>Hughes</strong>. “This<br />

relationship is a powerful way to make broadband a reality for the millions of Americans<br />

and small business owners who cannot get high-speed Internet access from cable or<br />

DSL providers.”<br />

Channels / Winter 2007 / www.hughes.com


Executive Corner<br />

continued from page 1<br />

opportunities at the edges of our<br />

core business that can help us<br />

grow faster, such as the mobile<br />

satellite development projects we<br />

won this year from ICO, MSV and<br />

TerreStar <strong>Network</strong>s. Everyone on<br />

the team is also working hard at<br />

maintaining effective cost controls<br />

that enable us to compete in<br />

a tough market, while making<br />

the margins we need for solid<br />

profitability.<br />

Out of This World<br />

Certainly the crowning achievement<br />

of 2007 was the successful<br />

launch of SPACEWAY 3 in August<br />

from Kourou, French Guiana.<br />

SPACEWAY, the world’s first satellite<br />

to employ onboard switching<br />

and routing, is now in its orbital<br />

position, and after payload and<br />

functionality testing, we expect<br />

to put it into commercial service<br />

offering <strong><strong>Hughes</strong>Net</strong> broadband<br />

services in North America during<br />

the first quarter of 2008.<br />

It’s a significant turning point for<br />

the entire <strong>Hughes</strong> community—<br />

shareholders, customers, and<br />

employees alike—because for the<br />

first time we will operate our<br />

own satellite. From a personal<br />

point of view, it was a crusade:<br />

we had to bring this technology<br />

to market. So much was riding on<br />

it—our reputations, our aspirations,<br />

and not least the nearly $2<br />

billion invested since 1998 to<br />

develop it. Admittedly, there were<br />

some temporary setbacks when<br />

<strong>Hughes</strong> went through changes in<br />

ownership. But all the anxieties<br />

disappeared in the roar of the<br />

rocket as SPACEWAY blasted off—<br />

it was an exhilarating experience.<br />

From Connectivity to <strong>Services</strong><br />

So how will we move forward? It’s<br />

my firm belief that we can shape<br />

the future of new broadband<br />

services and thereby expand our<br />

addressable market. Connectivity<br />

alone is becoming a commodity<br />

and the future lies in offering<br />

people and organizations services<br />

and applications they don’t have<br />

today. We will seek out those<br />

10 Channels / Winter 2007 / www.hughes.com<br />

new applications, expand our<br />

traditional markets, and probe<br />

new opportunities. Telematics, for<br />

example, is a business we were<br />

not in two years ago. When the<br />

opportunity arose to enter that<br />

market, we jumped in and have<br />

conducted significant technology<br />

and engineering work. Other<br />

examples we can build on are<br />

several major managed services<br />

contracts we won this year, which<br />

include multi-casting of digital<br />

video to point-of-sale locations,<br />

a key element of many new<br />

applications.<br />

“From a personal point<br />

of view, SPACEWAY<br />

was a crusade. We<br />

had to bring this<br />

technology to market.”<br />

– Pradman Kaul,<br />

Chairman and CEO, <strong>Hughes</strong><br />

Closing the Digital Divide<br />

Broadband is growing so fast<br />

globally that we sometimes forget<br />

about the billions of people in<br />

both developed and developing<br />

nations who can’t get it. We’re<br />

already working on several<br />

exciting initiatives to provide<br />

satellite broadband connectivity<br />

to underserved areas around<br />

the world, including regions in<br />

India, Brazil, China, Russia, and<br />

the United States. In India, for<br />

example, we launched a novel<br />

initiative to implement Internet<br />

kiosks, providing <strong><strong>Hughes</strong>Net</strong><br />

e-services in rural towns and<br />

villages.<br />

A key application in closing the<br />

digital divide is e-learning, which<br />

brings courses via broadband<br />

from institutions and professors<br />

to areas that would not otherwise<br />

have access to such resources.<br />

Telemedicine is also an important<br />

satellite broadband-based initiative<br />

that gives people in rural areas<br />

access to the kind of medical<br />

expertise that is available only<br />

in urban areas. And satellite<br />

broadband also enables<br />

e-governance services so that<br />

people in remote areas can, for<br />

example, get a birth certificate,<br />

apply for a driver’s license, or<br />

pay taxes online.<br />

The Formula for Success<br />

I see a very bright future for<br />

<strong>Hughes</strong>. Our continuing challenge<br />

going forward will be to maintain<br />

our focus and leadership in our<br />

core business, while still probing<br />

opportunities on the edges and<br />

always seeking to create new<br />

markets. We reached some<br />

significant milestones this year<br />

and should never forget what<br />

brought us here—a remarkable<br />

group of competent people who<br />

work hard, who like what they<br />

do, who like each other, and<br />

who believe in each other. That<br />

is the formula for success, and I<br />

remember that every day.


Riding the Wave of <strong><strong>Hughes</strong>Net</strong><br />

<strong>Managed</strong> <strong>Network</strong> <strong>Services</strong><br />

continued from page 1<br />

experience deploying very large<br />

networks, including more than<br />

70,000 network nodes for lottery<br />

terminals worldwide, was a key<br />

factor in our decision.”<br />

<strong>Hughes</strong> has gained that experience providing broadband satellite<br />

networks and services to GTECH Corporation, the world’s largest<br />

lottery and gaming solutions company. (See related story in<br />

Channels, Spring 2007). Today, the GTECH network connects<br />

more than 70,000 lottery sites in the U.S., using 10 network hubs<br />

and all the necessary operations equipment to deliver highquality,<br />

end-to-end lottery services to its customers.<br />

But managed services go far beyond the lottery business.<br />

Industry leaders in the retail, restaurant, entertainment, and<br />

petroleum sectors rely on <strong><strong>Hughes</strong>Net</strong> <strong>Managed</strong> <strong>Services</strong> for<br />

their enterprise networks. The Yankee Group recognized this<br />

leadership in a 2006 report, documenting more than 110,000<br />

sites managed by <strong>Hughes</strong> in the U.S. alone.<br />

For example, BP Products North America employs the <strong><strong>Hughes</strong>Net</strong><br />

Optimized VPN service to connect its 14,000 retail stations<br />

across the U.S. (See related story in Channels Summer 2006.)<br />

In Europe, BP uses <strong><strong>Hughes</strong>Net</strong> Optimized VPN to connect over<br />

4,000 sites throughout the U.K., Germany, Luxembourg, and<br />

Austria. As a fully managed broadband offering, <strong><strong>Hughes</strong>Net</strong><br />

Optimized VPN creates a seamless network service by using the<br />

most efficient and cost-effective technology available at each<br />

site—whether satellite or landline. The result is a uniform and<br />

cost-efficient broadband service at each station, and includes<br />

all operations, network management, and proactive monitoring.<br />

Both Camelot and BP are prime examples of a trend in which<br />

today’s enterprises are moving away from the direct operation<br />

and maintenance of their networks. Instead they’re relying on a<br />

single proven provider to manage all their network needs, freeing<br />

staff to focus on running their core businesses and on building<br />

growth and revenue, confident that network management is in<br />

the hands of an experienced service provider.<br />

“We are proud to have been selected by Camelot to provide<br />

the broadband network solution and services for this nextgeneration<br />

lottery system in the U.K.,” said Pradman Kaul,<br />

chairman and CEO, <strong>Hughes</strong>. “In today’s competitive business<br />

environment, enterprises need expert partners to help them meet<br />

their business goals. With our success providing networking<br />

solutions and services on two continents, <strong>Hughes</strong> is now poised<br />

to expand <strong><strong>Hughes</strong>Net</strong> <strong>Managed</strong> <strong>Services</strong> globally.”<br />

1 Yankee Group Decision/Note SM Market Analysis, February 24, 2006,<br />

“How to Succeed in the $25 Billion <strong>Managed</strong> Service Market,” Anton Denissov.<br />

The Many Flavors of<br />

The <strong><strong>Hughes</strong>Net</strong> portfolio of managed services combines<br />

the best of landline and satellite broadband technologies,<br />

state-of-the-art management systems, and a dedicated<br />

program management team to deliver turnkey solutions to<br />

businesses in all industries.<br />

<strong>Network</strong> <strong>Services</strong> deliver enterprise-grade VPN solutions that<br />

provide superior network reliability, affordable broadband<br />

connectivity, and an integrated managed network.<br />

Digital Media <strong>Services</strong> deliver high-impact corporate<br />

communications to multiple locations and high-quality<br />

media content to customers at the point of purchase.<br />

Business Continuity solutions provide cost-effective backup<br />

connectivity via broadband satellite to ensure that critical<br />

business applications are always up and running.<br />

Professional <strong>Services</strong> offer enterprises network consulting<br />

services tailored to their individual business needs.<br />

Why do Companies Select<br />

When enterprises seek a managed services provider,<br />

they look for technology and market leadership,<br />

deep experience, and strong customer support. That’s<br />

why they turn to <strong>Hughes</strong>.<br />

A Snapshot of <strong>Hughes</strong><br />

The worldwide market leader in broadband satellite<br />

services and technology<br />

A single provider for both satellite and terrestrial<br />

networks<br />

Recognized by the Yankee Group as a top-tier managed<br />

network provider<br />

Global service delivery with sales offices and<br />

operations worldwide<br />

Channels / Winter 2007 / www.hughes.com<br />

11


n Czech Provider GiTy Selects Expandable<br />

HN System to Connect Public Libraries<br />

GiTy, the Czech Republic’s leading<br />

telecommunications service provider, selected<br />

<strong>Hughes</strong>’ latest generation HN broadband satellite<br />

system to support a network that provides broadband<br />

Internet/intranet access for public libraries in the<br />

Czech Republic. The system comprises an HN NOC cx<br />

network operations center and over 500 HN7000S<br />

broadband satellite terminals. The NOC cx is designed<br />

for service providers and enterprises with small initial<br />

network requirements, yet is readily expandable as<br />

service demand justifies. A highly efficient<br />

architecture incorporates numerous advanced<br />

features, including guaranteed quality of service<br />

levels.<br />

n Broadband Critical to Small Business Success<br />

In a recent survey conducted by <strong>Hughes</strong>, rural small<br />

business owners said that broadband access is<br />

“extremely important” to their business success. The<br />

majority of small business owners and managers<br />

surveyed operate in rural areas—those beyond the<br />

reach of DSL and cable broadband service. Prior<br />

to the availability of satellite broadband, these<br />

business people were reliant upon dial-up Internet<br />

connections, now considered too slow and unreliable<br />

for business use.<br />

The survey of nearly 600 self-identified small business<br />

owners and managers indicated that customer<br />

communications, research, and order processing<br />

were primary needs addressed by broadband services.<br />

Nearly 100 percent of those surveyed said that they<br />

use the Internet for business purposes regularly. In<br />

addition to using satellite broadband services for<br />

their primary needs, small business respondents also<br />

use the Internet to maintain or manage a company<br />

Website (32%); download files (86%); manage<br />

inventory (12%); and use instant messaging (24%).<br />

11717 Exploration Lane<br />

Germantown, MD 20876 USA<br />

n World’s Most Efficient Satellite Standard in Brazil<br />

<strong>Hughes</strong> Brazil has implemented the region’s first<br />

DVB-S2/IPoS satellite hub, giving customers higher<br />

system availability and greater throughput as a<br />

result of the enhanced system capabilities derived<br />

from the DVB-S2/IPoS standard, including ACM<br />

(adaptive coding and modulation). The new <strong>Hughes</strong><br />

HN System optimizes link performance, even in<br />

networks with geographically diverse locations and<br />

in high rain areas, by adjusting error-correcting codes<br />

and modulation dynamically based on signal quality<br />

feedback from HN remote terminals. The greatly<br />

improved Low Density Parity Check (LDPC) error-<br />

correcting codes, combined with the adaptability<br />

features, make the <strong>Hughes</strong> solution the most<br />

efficient DVB-S2/IPoS platform on the market today.<br />

<strong><strong>Hughes</strong>Net</strong> customers are currently being activated<br />

on this hub, and it is estimated that by year end<br />

approximately 1,500 customer sites will be receiving<br />

<strong><strong>Hughes</strong>Net</strong> service through the new DVB-S2/IPoS<br />

with ACM hub.<br />

n New <strong>Hughes</strong> Operations Center in Brazil<br />

<strong>Hughes</strong> Brazil has completed the migration of<br />

its network operations center (NOC) from Cotia<br />

to Barueri in the state of São Paulo, enabling<br />

expansion of satellite capacity and services<br />

throughout Brazil and South America. The NOC is<br />

now located at Terremark Brazil, one of the largest<br />

IP Traffic Exchange Peering Points in Latin America.<br />

The Terremark facility provides a more suitable<br />

infrastructure to meet <strong>Hughes</strong>’ increasing traffic<br />

needs, as well as the advantage of being connected<br />

to the backbones of all major operators in Brazil and<br />

the ability to support future expansion in a highly<br />

secure environment.<br />

“We are confident that combining neutrality,<br />

reliability, mass connectivity, and the operations of<br />

the most important Multilateral IP Exchange Point<br />

in the region will provide increased synergy between<br />

<strong>Hughes</strong> and our customers, a strategy that is in<br />

line with Terremark’s marketplace business model<br />

throughout the world,” said Hugo Zanon, managing<br />

director, Terremark Brazil.<br />

n <strong>Hughes</strong> On The Move—Two <strong>Hughes</strong> Teams<br />

Compete in U.S. Army Ten-Miler<br />

Congratulations to the 15 runners from <strong>Hughes</strong> who<br />

competed in the 23rd Annual Army Ten-Miler on<br />

October 7, 2007 in Washington, D.C. Sponsored by<br />

the Association of the United States Army (AUSA),<br />

the Army Ten-Miler is America’s largest ten-mile<br />

road race, drawing civilian and military participants<br />

from across the country, as well as competitors from<br />

around the world. The event began and ended at the<br />

Pentagon and followed a ten-mile course through<br />

scenic downtown Washington within view of historic<br />

monuments, memorials, and buildings. Kudos to<br />

<strong>Hughes</strong> Running Club Team 1 from the Corporate<br />

Division who ranked 11th out of 76 competing<br />

teams, and <strong>Hughes</strong> Running Club Team 2 in the<br />

All Comers Division who took the 15th spot out<br />

of a roster of 31 teams.<br />

n Residential “Shownet” Internet <strong>Services</strong><br />

in the Arabian Gulf<br />

Kuwait-based Gulfsat Communications Company,<br />

a leading satellite service and solutions provider in<br />

the Middle East and North Africa, has purchased<br />

an HN System network operations center (NOC) to<br />

begin providing a new broadband residential Internet<br />

access service called “Shownet Two-Way Service”<br />

in the Gulf region in the 4th quarter of 2007.<br />

“We are very pleased to be using the <strong>Hughes</strong><br />

broadband satellite platform to provide our new,<br />

two-way residential Internet service and to have the<br />

first DVB-S2 NOC serving the residential market in<br />

the Gulf region,” said Mustafa Murad, chief operating<br />

officer at Gulfsat. “The <strong>Hughes</strong> implementation<br />

of DVB-S2 allows us to provide a very efficient<br />

and cost-effective service to our customers with<br />

improved satellite Internet browsing and download<br />

performance at a level that traditional landline<br />

service cannot match.”<br />

Presorted<br />

First Class Mail<br />

U.S. Postage<br />

PAID<br />

Germantown, MD<br />

Permit No. 4413

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