Hughes Network Systems campus in Germantown, MD. Photo Credit: Hughes

Hughes Network Systems revenue grew 5% in 2021 to a record $1.96 million, despite a decrease in broadband subscribers. Hughes’ financials were released as part of parent company EchoStar Corporation’s fourth quarter financial report on Feb. 24. In addition, Hughes confirmed that the anticipated Jupiter 3 satellite will launch in the fourth quarter of this year, per an update from manufacturer Maxar Technologies. 

Overall, EchoStar reported $1.99 million in revenue in 2021 — revenue from Hughes accounts for most of the company’s revenue. Consolidated revenue in the fourth quarter was $499 million, up $9 million compared to the same period last year, driven by the Hughes segment. Hughes equipment revenue increased $19 million in the quarter, with higher sales in the U.S. and internationally, although service revenue decreased $10 million due to the lower U.S. consumer subscribers.

Hughes continues to see a decline in broadband subscribers in the U.S. and Latin America as the company is capacity constrained while awaiting the launch of the Jupiter 3 satellite. At the end of 2021, Hughes reported approximately 1,462,000 broadband subscribers, a decline of 48,000 from the third quarter. The company said this reflects balancing capacity utilization with subscriber levels in areas where there is high bandwidth demand in the U.S. and Latin America.

Hughes Network Systems President Pradman Kaul said on a call with investors that 18,000 subscribers of that decline came from Latin America, which has now become capacity constrained. 

“We continue to manage our U.S. consumer broadband sales and marketing efforts proactively to optimize our service to existing subs. This is especially critical as we manage the business within our current capacity constraints. Not surprisingly, our U.S. subscriber base declined by approximately 30,000,” Kaul said. “At the same time, our U.S. retail ARPU remained strong because our subscribers’ bandwidth usage continued to grow. We expect the subscriber and ARPU trends to continue in the near term as consumers use more and more data.” 

Also this week, EchoStar announced new CEO Hamid Akhavan will succeed CEO and President Michael Dugan, who has been with the company for more than 30 years. 

EchoStar Chairman Charlie Ergen said during the call that Akhavan was attractive to the company because he is an engineer with technical experience, as well as private equity experience. Ergen said that Akhavan comes onboard when the company has a strong balance sheet with opportunity, “whether that be consolidation within the industry or whether that be in new places to go.” 

Ergen hinted at future opportunities with private networks, enterprise connectivity, and backhaul for telcos. 

“We have tremendous opportunity. As we’re a connectivity company, we’ve done well with satellite, but there’s tremendous opportunity terrestrially. There’s tremendous opportunity to tie in satellite with telco,” Ergen said.