Hughes rethinks satellite strategy
New federal focus will be on providing redundant networks, remote connectivity
- By Michael Hardy
- Apr 10, 2006
Hughes Network Systems is taking a fresh view of the federal government satellite communications market, propelled by a recent change in its ownership and new leadership in the form of Tony Bardo, hired from Qwest Communications to run Hughes’ federal effort.
The company recently unveiled HughesNet, a new brand name for the company’s service offerings that replaces DirecWay.
Although the company will continue to expand its services into the commercial and consumer markets, its management also wants to broaden its reach in the government, said Bardo, assistant vice president of government solutions.
Various Hughes entities have done business with the federal government in the past years, but those organizations have since become stand-alone companies or have been sold. “This Hughes entity has not had a lot of federal presence,” Bardo said.
Like other satellite companies, Hughes envisions a significant market in serving federal employees, such as park rangers, who work in remote locations. The company also plans to tout the value of redundant networks with a different architecture than the primary network for continuity of operations.
“You can have two [land-based networks], but they’re going to have the same choke points” and vulnerabilities, Bardo said.
David Helfgott, chief executive officer at Hughes rival Americom Government Services, said commercial satellite services have become a core part of Defense Department communications operations. The General Services Administration is working on Satcom-II, a satellite communications contract that could drive more demand among civilian agencies, he said.
“This is a very dynamic market, and there’s always a new niche that brings new players,” Helfgott said.
Increasing demands and a potentially decreasing supply combine to create a sense of urgency for both industry and government to resolve long-standing difficulties that have complicated the procurement of satellite services, he said.
“There’s a lot of forces at work pushing the satellite industry and government to work closer together,” Helfgott said.
Consultant Frank Dzubeck, president of Communications Network Architects, said Hughes’ strategic moves are well-
advised for the company but are unlikely to make a major difference in the broader competitive context.
“There’s a business to be made here,” Dzubeck said. However, a profitable opportunity calls for a combination of need, bandwidth requirements and the number of potential users, he said. If enough people in a remote location need satellite bandwidth, a provider could score a big win.
“What [Hughes is] saying is that there are enough of those opportunities that are definable within the federal market space,” he said.