EchoStar ‘Very Serious’ About Launching DTH Service in Brazil
The operator, which bought a 45 degrees west orbital position from the Brazilian telecommunications agency Anatel, is preparing to move EchoStar-15 satellite to that slot to demonstrate and test delivery of DTH services, EchoStar analysts have said. An EchoStar spokeswoman declined to comment. The timing for the test hasn’t been disclosed. But EchoStar has said it would move EchoStar-15 once EchoStar-16, which was launched to 61.5 degrees west last November, went into operation, which occurred earlier this year. EchoStar-16 transponders are leased to Dish Network. The 32-Ku transponder EchoStar-15 went into operation in 2010.
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EchoStar hasn’t identified potential partners, but analysts said last fall that Brasil Telefonica and Oi were among the leading candidates. Fixed line operators Brasil Telefonica and Oi view satellite as a means for expanding their geographic reach and EchoStar has sought a presence in Brazil, where DirecTV Latin America has a strong presence, analysts familiar with the Brazil market have said. Anatel forecast Brazil having 17 million pay-TV households by late 2012, a market that’s expected to further expand with the arrival of the 2014 FIFA World Cup.
"We're moving a spacecraft into the slot, demonstrating capability and testing delivery into Brazil and I guess you would say our confidence continues that it’s a great slot and market,” Carroll said on an analyst call Thursday. “We have some unique capabilities to build a service there and we're working very hard to get an in-country partner. Moving the satellite takes us a big way toward getting that done."
EchoStar executives declined comment on reports that billionaire Carlos Slim was preparing to make an aggressive push into Mexico’s TV market that could include wireless operator Americana Movil’s option to buy control of Dish Mexico. Slim owns 31 percent of Americana Movil and is said to be seeking to take advantage of new telecommunications legislation pending in Mexico that’s designed to give consumers more options in satellite and cable. EchoStar operates Dish Mexico in a joint venture with MVS Communicaciones. Dish has a satellite services agreement with SES for the QuetzSat-1 satellite that supplies programming to Dish Mexico. QuetzSat-1 went into service in 2011 and was moved to 77 degrees west from 67.1 degrees west and began operations at the new location in February, EchoStar has said. Dish Network leased five of the 24 transponders on QuetzSat-1.
EchoStar’s Q1 net income dropped to $3.4 million from $126 million a year earlier despite revenue rising to $795.4 million from $764.7 million a year earlier. Equipment revenue from Dish Network, driven by sales of The Hopper DVR/satellite receiver, jumped to $308.8 million from $237.3 million, while that from “other” sources -- largely Bell TV in Canada -- fell to $102 million from $157.3 million. Bell recently started taking delivery of a new HD set-top that offers a USB drive as a DVR option, EchoStar officials said. The other segment suffered lower sales of set-tops and accessories, EchoStar said. Service and other revenue tied to Dish and related to web development and satellite operation rose to $139.9 million from $126.6 million.
EchoStar signed a contract for construction of the EchoStar-19 multi-spotbeam Ku-band satellite that will provide added capacity for the HughesNet broadband service. The so-called Jupiter-2 satellite is scheduled to launch by mid-2016, the company has said. EchoStar had prepaid $11.8 million on the satellite as of March 31. Jupiter-2 will deliver 160 Gbits of throughput, providing 60 percent more capacity than EchoStar-17, company officials said. The new satellite will cover the U.S. and “much of” Mexico and Canada, EchoStar CEO Michael Dugan said. EchoStar had $1.1 billion of satellite-related obligations as of March 31, including those tied to EchoStar-19, the company said.
EchoStar’s Hughes Communications’ EBITDA slipped to $63.9 million, from $69.2 million a year earlier, despite a rise in revenue to $289.3 million from $274.2 million. HughesNet added 66,000 net subscribers in Q1 to end the quarter with 692,000, up from 636,000 a year earlier. The total doesn’t include 28,000 that were receiving service from a transponder aboard EchoStar-17 that’s leased to Xplornet Communications that provides broadband service in rural areas in Canada. Hughes also has a broadband distribution agreement with Dish Network’s dishNET, which has the option to sell HughesNet. DishNET pays Hughes a monthly per subscriber wholesale service fee based on a subscriber’s service level and, starting Jan. 1 2014, based on volume subscription thresholds, EchoStar said. EchoStar also provides broadband services for Frontier Communications.
EchoStar Technologies, which supplies set-tops, posted a gain in EBITDA to $29.9 million from $24.4 million, as sales grew to $426.9 million from $408.5 million. EchoStar Satellite Services, which operates the satellites, improved EBITDA to $64.8 million from $52.2 million on sales of $74.2 million, up from $73.5 million. Dish Network leases for EchoStar-6 and EchoStar-8 satellites expired in Q1 as it shifted to EchoStar-16, EchoStar said. EchoStar also has only six of 32 transponders remaining operational on EchoStar-3, the company said. The satellite has suffered a series of traveling wave tube amplifier failures in recent years, cutting the number of transponders that could be operated, EchoStar said. A solar panel “anomaly” also has reduced capacity on SES’s AMC-16 satellite on which EchoStar leases transponders. As a result, EchoStar recorded a $7 million gain in Q1 as it reduced a capital lease obligation.