Hughes Network Systems of Germantown, seeking to further penetrate the Russian broadband market, on Monday announced a memorandum of understanding with that nation’s largest satellite communications operator.
Hughes, which provides satellite broadband to more than 620,000 subscribers, signed the cooperation agreement with Russian Satellite Communications. The agreement calls for the companies to explore developing multimedia video and broadband Internet services via the Russian company’s satellites. The companies announced the agreement during the Sviaz-ExpoComm Exhibition in Moscow.
“The Russian market is growing rapidly and is strategically important to Hughes,” Arunas Slekys, the company’s vice president and general manager for Russia and the Commonwealth of Independent States, said in a statement.
Hughes said it wants to examine the possibility of deploying its research and production capabilities on Russian territory, while the Russian company will use Hughes’ experience to develop and manage its Russian networks. Hughes has provided satellite services to Russia and the Commonwealth of Independent States since the early 1990s, according to Hughes informaiton.
EchoStar of Englewood, Colo., purchased Hughes for $2 billion nearly a year ago.
“We look forward to working with [Russian Satellite Communications] in exploring new value-added broadband data and video solutions in Russia, leveraging the complementary experience of both companies in satellite technologies and service delivery,” Slekys said in the statement. He was in Russia for the announcment and could not be directly reached for comment.
Russian Satellite Communications has 10 satellites, covering Russia, the Commonwealth of Independent States, other parts of Europe, the Middle East, Africa, the Asia Pacific region, North and South America and Australia, according to company information.
Russia had 19.2 million residential broadband subscribers at the end of 2011, according to Advanced Communications and Media, a Russian company that monitors the industry. That was 40 percent of all Russian households, up from 27.2 percent a year earlier.
Global revenues from consumer satellite broadband services reached $1.1 billion in 2010, up from $1 billion in 2009, according to the most recent report by the Satellite Industry Association. U.S. revenues account for 70 percent of this total. Satellite services, which includes broadband, account for 60 percent of the satellite industry’s total $168.1 billion in global revenues.
“We are happy to expand cooperation with Hughes,” Yurik Prokhorov, the Russian satellite company’s director general, said in a statement. His company “seeks to implement state-of-the art technological solutions and innovative practices in the global satellite communications market, and Hughes brings unique technology and market experience in addition to that of other [Russian Satellite Communications] industry partners from abroad.”
Also Monday, Hughes announced the shipping of its EchoStar XVII satellite to French Guiana, where it is to be launched next month. The satellite, which was built by Space Systems/Loral, will have 100 times the capacity of the current Hughes satellite it replaces, said Hughes spokeswoman Judy Blake.
It will enable HughesNet Gen4 high-speed Internet services to more than 1.5 million subscribers, Pradman Kaul, Hughes president, said in a statement.