EchoStar Closes $2B Hughes Deal

Posted by Sam Churchill on

Colorado-based EchoStar has closed on its acquisition of broadband-satellite services company Hughes Communications in a $2 billion deal. In February, 2011, EchoStar agreed to buy Hughes Communications, the satellite Internet company, for $1.3 billion. Including debt, the deal is valued at about $2 billion.

Hughes sells satellite Internet access, and has nearly 560,000 customers in North America. It also sells business satellite communications services handling credit card transaction data and inventory tracking, and it sells satellite video and data services to other telecom and media companies.

EchoStar is affiliated with the Dish network, the satellite television network. It has 14.3 million satellite viewers in the United States. In January 2008, DISH Network split from Echostar, with each entity becoming a separate company. Echostar is the key technology partner to DISH Network, and focuses only on marketing and providing satellite television service.

DISH-TV is in direct competition with the other major U.S. broadcast satellite television provider, DirecTV, which had 19.2 million subscribers at the end of 2010. DirecTV was previously controlled by Hughes, then News Corp. In 2008, Liberty Media Corporation purchased News Corporation’s controlling interest in DirecTV.

For satellite internet access, WildBlue is ViaSat’s two-way satellite Internet service. It serves over 400,000 subscribers within the 48 contiguous United States. The company is expecting to launch a massive new spotbeam satellite, ViaSat-1 at the end of July.

Currently Hughes uses the Spaceway-3 satellite for internet access. It competes with ViaSat’s WildBlue satellite. HughesNet, which is what EchoStar is buying, was formerly known as DirecWay. News Corp spun off the two-way satellite business when it bought DirecTV. The HughesNet JUPITER satellite is the mirror image of ViaSat-1, and due to launch in the first half of 2012.

Both ViaSat-1 and HughesNet’s Jupiter are expected to provide satellite internet access up to 10 Mbps in the United States by the summer of 2012.

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Posted by Sam Churchill on Thursday, June 9th, 2011 at 6:26 am .

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