EchoStar Leasing Capacity for Brazil Direct-to-Home Satellite Service
EchoStar is leasing capacity from Dish Network on EchoStar-15, having moved the satellite, potentially setting the stage a direct-to-home (DTH) service in Brazil, analysts said. EchoStar-15 is expected to be operational at its new 45 degrees west slot by early fall, EchoStar officials have said.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
The 32-transponder EchoStar-15, which was launched to 61.5 degrees west in 2010, was moved to allow for test delivery of DTH services, EchoStar executives have said. The tests are key as EchoStar moves into talks with potential partners, including fixed line operators Brasil Telefonica and Oi, analysts have said. EchoStar’s discussions with potential partners have progressed, EchoStar executives said Tuesday on conference call. Additional details weren’t disclosed. EchoStar bought the 45-degree orbital slot for $80 million from the Brazilian telecommunications agency Anatel. Echostar-15 will be capable of serving major markets in Brazil and will do so until a new satellite is built, which typically takes three years, EchoStar executives have said.
"We believe the finalization of the joint venture could serve as a catalyst and highlight the company’s ability to create value in international markets,” Stephens analyst Tim Quillin said in a research note.
EchoStar’s capacity agreement with Dish for EchoStar-15 expires in February, EchoStar said in an SEC filing. In moving EchoStar-15, EchoStar leased capacity to Dish in May aboard EchoStar-8, which was moved to EchoStar-15’s former slot at 61.5 degrees west from 77 degrees west to serve as a spare satellite, EchoStar said. EchoStar suffered additional traveling wave tube amplifier failures on EchoStar-6 in February and April, leaving the satellite with six transponders, the company said in an SEC filing. EchoStar-6 is being moved to 96.2 degrees west from 77 degrees west since it has “limited life” left, EchoStar officials have said.
EchoStar swung to a $9.5 million Q2 net loss from a $35.4 million profit a year earlier, taking a $35 million impairment charge on the value of its EchoStar-7 satellite. The 11-year-old satellite, at 119 degrees west, had suffered a series of solar array anomalies since last fall that cut the electrical power available, reducing the number of transponders that could be operated, the company said. As a result, EchoStar slashed the satellite fair value to $11 million and revenue from Dish Network, which leased transponders, wasn’t enough to recover its carrying value, the company said. EchoStar’s revenue rose to $830 million from $806 million. Hardware sales rose to $333.9 million from $254.3 million a year earlier as sales to Dish, including its Hopper DVR/satellite receiver, rose 55 percent to $309 million, the company said.
EchoStar’s Hughes Communications increased subscribership to its HughesNet service to 736,000 from 636,000 in December and 692,000 in late March, the company said. HughesNet gets service from the EchoStar-17 and Spaceway-3 satellites. The number of subscribers to third-party satellite broadband services via Hughes satellites increased to 35,000 in Q2 from 23,200 in December. Hughes didn’t identify the third-party companies, but it provides capacity to Dish Network’s dishNet and Frontier Communications’ broadband services. Hughes had a $1.064 billion contract revenue backlog as of June 30, up from $1.063 billion a year earlier, the company said.
The satellite company will get “certain amounts of cash” from Dish this month in connection with Canadian spectrum development rights for a satellite at 103 degrees west, EchoStar said. EchoStar struck a spectrum development pact with Ciel Satellite Holdings in 2012 for capacity aboard SES’ SES-3 satellite that will be leased to Dish, EchoStar said.