Hughes Network Systems has created an Australian subsidiary to take advantage of the country’s demand for Ka-band satellite services.
Hughes is the first company without an established Australian unit to publicly announce its interest in working with the…
Hughes Network Systems has created an Australian subsidiary to take advantage of the country’s demand for Ka-band satellite services.
Hughes is the first company without an established Australian unit to publicly announce its interest in working with the Australian government on its National Broadband Network (NBN).
Australia’s NBN plan requires the construction of at least two Ka-band satellites in order to provide telecommunications to the 3% of Australian rural communities that fall outside terrestrial networks.
Hughes CEO Pradman Kaul said: “We congratulate the Australian government on its mission to bridge the digital divide across this vast and beautiful country.
“Satellite is the ideal technology to bring high-speed internet services to homes and offices affordably even in the least populated areas, and establishing this office means we can more actively engage in helping fulfil that mission.”
Hughes has established a strong consumer and enterprise satellite broadband business in the USA. However, the Australian market is unlikely to be capable of supporting a stand-alone business model along those lines, and Hughes will look to receive considerable funding from the Australian government well beyond the costs of any initial satellite systems it may build if the endeavour is to be profitable.
In the outline of NBN recommendations released earlier this month, NBN Co clearly stated that the required price of services from the plan’s satellites will be too low to provide a commercial return.
This point was echoed at this week’s Australasia Satellite Forum in Sydney. Paul Sheridan, vice-chairman of Optus, Australia’s largest satellite operator, said: “The proof is in the way that our business operates. It’s primarily a television broadcast business. That’s what gets the satellites up there. We’re then able to leverage the capacity to provide a telecommunications solution – the Australian Broadband Guarantee Funding definitely affected the uptake of those services. Could it be done stand-alone? We haven’t been able to find a way to do it.”
Professor Reg Coutts of the consultancy Coutts Communications said that the market has thus far failed to provide telecommunications to that last 3% of Australians.
“It’s not a business case, it’s a cost/benefit analysis,” he said. “It’s about empowering those remote communities to be part of the wider Australian community. Over 30 years I’ve seen a lot of business cases and some are very useful, but I don’t think they are a reality.”
Hughes said that it was looking forward to working with Australian partners. The company already has a long history of supplying satellite broadband technology to existing Australian operators.
