Hughes Goes on the Record Regarding Number of Satellite Broadband Subs.
broadband-daily.com
El Segundo, CA-based U.S. satellite giant Hughes Electronics issued its Q2 report 7/16, showing pessimism in terms of the growth of DBS customers this year and revealing officially for the first time the number of broadband satellite customers it has been able to garner with its DirecPC (now DIRECWAY) service.
From a big picture financial perspective, Hughes Electronics, parent of digital video satellite service DirecTV, said that its net loss more than doubled during Q2 due to slowing sub. additions. Hughes' Q2 total revenues rose 8.1% to $1.99 bil.,up from the $1.84 bil. in 2000, while its net loss grew to $156.5 mil., compared to a net loss of $69.1 mil. in the year-ago quarter.
Despite the fact that DirecTV, Hughes' most important unit, now serves ten mil. customers, or one out of every ten multichannel video customers in tbe U.S., the company is churning through customers as U.S. cable operators fight back against satellite competition via dish buyback programs and other competitive checks. DirecTV added 745K gross subs. during the quarter, but after churn, this increase was whittled down to a mere net gain of 175K subs.
Hughes cut its full-year expectations for net sub. additions for DirecTV to about 1.1 mil., from 1.3 mil., a target that has already been lowered once this year from 1.5 mil. to 1.7 mil.
The picture didn't look any brighter for Hughes' broadband forays. For the first time ever, Hughes went on the record with the number of subscribers to its DIRECWAY (formerly DirecPC) service, which delivers, for the most part, one-way broadband services via satellite. Despite the backing of high-powered service partners including America Online, EarthLink and Juno, DIRECWAY counted only 74K total customers in the U.S., capturing an additional 12K customers during the quarter.
Although Hughes had expected to add 200K DIRECWAY customer for the full fiscal year, the company is now only projecting an additional 150K new customer for the year as a whole. On the good news front, Hughes expects DIRECWAY to generate an EBITDA loss of $150 to $180 mil. for the year, down from the $160 mil. to $200 mil. originally projected.
Hughes' experiment in providing DSL service via its acquisition of Telocity fared only a little better. DIRECTV DSL service had more than 68K residential DSL customers as of 6/30, up only 4K over Q1 levels due to the bankruptcy of former wholesale provider NorthPoint. The company is now project net adds for DIRECTV DSL of only 75K for the year, down from the 100K originally expected, with EBITDA loss narrowing from $120 mil. to $140 mil. down to $100 mil. to $120 mil.
More Hughes news: according to 7/16 press reports, Hughes' rival EchoStar has dropped its plans to bid for the company, paving the way for Murdoch-controlled News Corp. to finally step in and close its long-anticipated deal to acquire a U.S. direct broadcast satellite company. |
