{"id":85305,"date":"2011-02-26T00:20:28","date_gmt":"2011-02-25T16:20:28","guid":{"rendered":"https:\/\/wp-productionenv-bjg9h2g2bgg5b8aa.southeastasia-01.azurewebsites.net\/news\/echostar-opts-for-hughes-short-term-profitability-over-terrastars-long-term-potential\/"},"modified":"2011-02-26T00:20:28","modified_gmt":"2011-02-25T16:20:28","slug":"echostar-opts-for-hughes-short-term-profitability-over-terrastars-long-term-potential","status":"publish","type":"post","link":"https:\/\/starpath.global\/news\/echostar-opts-for-hughes-short-term-profitability-over-terrastars-long-term-potential\/","title":{"rendered":"EchoStar Opts for Hughes\u2019 Short-Term Profitability Over TerraStar\u2019s Long-Term Potential"},"content":{"rendered":"<p>[02-25-11] <strong>EchoStar<\/strong>\u2019s $2 billion acquisition of <strong>Hughes Communications<\/strong> and its subsidiaries is expected to close later this year, creating a synergy that will allow Hughes to both use EchoStar bandwidth and back out of its existing Ku-band satellite capacity leases.<br \/>\n&nbsp;&nbsp;&nbsp; While EchoStar will be Hughes\u2019 sixth owner in its long history, the Maryland-based company stands to benefit significantly from EchoStar\u2019s 10 satellite-network and leading position in the video transmitting market, according to Hughes spokesman Arunas Slekys. <br \/>\n&nbsp;&nbsp;&nbsp; \u201cThe acquisition doesn\u2019t change the way Hughes operates, but we\u2019re coming into an extensive fleet of satellites and becoming part of a business strategy that is pretty much parallel with our own, which has always been to develop satellite networks for enterprise and government users and, recently, the consumer markets,\u201d Slekys told Satellite News.<br \/>\n&nbsp;&nbsp;&nbsp; Hughes proved to be the more attractive acquisition for EchoStar over its other option, <strong>TerraStar<\/strong>, by providing immediately profitability for EchoStar versus the long-term possibility of profiting from TerraStar\u2019s radio spectrum. \u201cHughes was a much better fit. I think [EchoStar president and CEO] Michael Dugan said it best when he said the two companies have a \u2018rich engineering culture.\u2019 EchoStar, like Hughes, has been a pioneer for satellite technology,\u201d said Slekys. \u201cI also think the next-generation Ka-band satellites we\u2019re launching in 2012 are such a leap in broadband technology that it appealed to EchoStar, as it has been looking to create its own wireless broadband offering for some time now. Everyone knows this is a huge market for satellite broadband in the United States.\u201d<br \/>\n&nbsp;&nbsp;&nbsp; In a conference call, EchoStar Chairman Charlie Ergen said in addition to Hughes\u2019 customer base and available technology, the acquisition also was the result of deals that were rejected by TerreStar\u2019s minority debt holders and lessons learned from earlier investments <strong>WildBlue<\/strong> and <strong>StarBand<\/strong>\u2019s satellite broadband systems, in which Ergen lost $150 million. \u201cEchoStar was interested in the satellite element as its own value and did not consider it as a mere key to unlock regulatory approval of the terrestrial spectrum, as was the case for TerreStar and its terrestrial-wireless potential. \u2026 We will now be investing in growth at Hughes, whether the growth comes from expanding Hughes\u2019 consumer broadband satellite service in the United State, or in starting similar services abroad,\u201d he said.<br \/>\n&nbsp;&nbsp;&nbsp; The deal creates another technology-based synergy in manufacturing, as EchoStar makes the set-top boxes and satellite dishes for its sister company <strong>Dish Network<\/strong>, while Hughes Network Systems develops equipment for satellite-based high-speed Internet for various enterprise and government customers.<br \/>\n&nbsp;&nbsp;&nbsp; Financially, the transaction was praised by both sides of the table as a win-win situation for all corporate entities involved. Apollo Management, Hughes\u2019 previous majority stockholder, gained a considerable profit from the sale, as Apollo bought Hughes for $50 million in 2004 and sold the company when it was valued at $360 million. After the deal is finalized, EchoStar will assume Hughes\u2019 debts and $1.35 billion in stock.<br \/>\n&nbsp;&nbsp;&nbsp; According to a Feb. 15 filing with the <strong>U.S. Securities and Exchange Commission<\/strong> (SEC), Hughes\u2019 executive management also profited, with a total of $13.45 million in payouts. Hughes CEO Pradman Kaul and Vice President Paul Gaske received $5.35 million and $2.4 million, respectively, with CFO Grant Barber and Executive Vice Presidents Adrian Morris and Grant Barber receiving $1.9 million apiece.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[02-25-11] EchoStar\u2019s $2 billion acquisition of Hughes Communications and its subsidiaries is expected to close later this year, creating a synergy that will allow Hughes to both use EchoStar bandwidth and back out of its existing Ku-band satellite capacity leases. &nbsp;&nbsp;&nbsp; While EchoStar will be Hughes\u2019 sixth owner in its long history, the Maryland-based company [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[2],"tags":[],"class_list":["post-85305","post","type-post","status-publish","format-standard","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/85305"}],"collection":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/comments?post=85305"}],"version-history":[{"count":0,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/85305\/revisions"}],"wp:attachment":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media?parent=85305"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/categories?post=85305"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/tags?post=85305"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}