Gen4 broadband service drives EchoStar subscriber growth
EchoStar said it picked up about 43,000 subscribers in the fourth quarter from its new HughesNet Gen4 satellite broadband service.
The company ended the year with 659,000 subscribers and attributed its subscriber growth to the launch of the Gen4 service in November. It is targeting subscribers in rural markets who don't have access to cable modem or DSL services, and it also has wholesale deals with Dish Network (Nasdaq: DISH) and Frontier Communications (Nasdaq: FTR). The Gen4 product offers download speeds of 15 Mbps.
"We are very pleased with the early results of Gen4 and look for the consumer business to be a primary growth factor going forward," EchoStar CEO Mike Dugan said on the company's earnings call Wednesday.
EchoStar also manufactures set-tops for corporate sibling Dish Network (Nasdaq: DISH), including the company's new Hopper multiroom DVR and its companion client set-tops, which the company calls Joey. Dugan said EchoStar expects set-top sales to Dish Network to grow. "They still have a large customer base of non-DVR customers that they're trying to upgrade. So right now, we look at the Dish set-top box, probably their demand to be flat or probably a little bit up," Dugan told analysts.
EchoStar generated $786 million in revenue in the fourth quarter, down from $834 million in the fourth quarter of 2011. It posted $26.2 million (28 cents per share) in net income, compared to a net loss of $12.9 million (15 cents per share) this time last year.
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Earnings summary: Cable in the fourth quarter of 2012