mercurycenter.com
AOL Mulling $1 Bln Hughes Satellite Stake - Report
NEW YORK (Reuters) - America Online Inc. could invest up to $1 billion in a two-way satellite communications system from Hughes Electronics Corp., expanding on existing deals, Business Week reported in its May 24 issue.
Citing ''sources close to the companies'', the report says the AOL-Hughes ties could extend beyond an existing programming deal with Hughes' DirectTV satellite television service and a converter box project with another Hughes unit.
Hughes' Network Systems unit announced the satellite project, known as Spaceway, announced in March. It is to begin service in North America in 2002 and provide high-speed voice, video, and Internet data communications largely to business subscribers.
Business Week said the Spaceway service could eventually be expanded to reach residential customers -- the core audience of America Online, which dominates the delivery of Internet services to U.S. consumers and to a lesser extent, worldwide.
''We can neither confirm nor deny speculation,'' said Marcy Woodhull, a spokeswoman for El Segundo, Calif.-based Hughes Electronics.
A spokesman for Dulles, Va.-based AOL also declined to comment on the report.
Tuesday, America Online announced the programming and set-top box deals with Hughes as part of its emerging AOL TV plans for a service to deliver interactive programming to home television sets, supplementing personal computer services.
The service, which would rely on standard phone lines and dial-up online links, will be introduced in 2000, AOL said.
The Hughes spokeswoman said the Spaceway project would deliver two-way, high-speed broadband satellite communications without the need for an additional phone line connection and would target both businesses and home office users initially.
The Spaceway project would represent a new generation of Hughes current DirectPC satellite delivery system, which has attracted 100,000 subscribers to a one-way system that relies on standard phone connections for return communications.
As part of its March announcement, Hughes said it would fully fund the North American leg of the Spaceway project with its own $1.4 billion investment but could seek additional partners for global expansion of the project. |
