A Publication of Inside Executive Corner the HUG knowledge, ideas, and experience to help Hughes better meet customer needs and help customers get the most out of Hughes products and

Inside the HUG

A P u b l i c a t i o n o f

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It’s amazing what happens when management, technical staff, engineers, and subject matter experts get together. They talk. They listen. And they learn. That is exactly what happened at the Hughes Users Group’s (HUG) annual meeting in

March. Held outside Austin in the heart of Texas hill country at the Horseshoe Bay Marriott Resort, HUG 2006 brought together customers and Hughes representatives to discuss common issues, network with industry peers, and spur innovation. Now in its fifteenth year, the HUG is made up of Hughes North American enterprise customers who meet annually and stay connected throughout the year.

It’s All About CommunicationDesigned to keep Hughes and its customers in close collaboration, the HUG leverages customer knowledge, ideas, and experience to help Hughes better meet customer needs and help customers get the most out of Hughes products and services.

“The HUG is all about open communication and creating an environment where people feel comfortable discussing issues common to Hughes enterprise customers or specific to a particular organization,” said Dave Zatloukal, senior vice president of network services, North America for Hughes. “Sharing ideas and experience stimulates creative problem-solving and leads to prioritizing issues that our customers want Hughes to work on.”

SUMMER 2006

P A G E

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Inside the HUG

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Executive Corner

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Executive CornerCont.

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A Winning TeamServing the Customer

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BP Speeds Customers on Their Way

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Closer Than You Think

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Countdown to SPACEWAY

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Over-the-air Testing

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The Network That Keeps Going... and Going...

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Hughes Unveils Brands and Products in Moscow

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Big Punch in a Small Package

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Inside the HUG Cont.

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Hughes QuickTakes

Executive Corner

Going Public: Hughes Enters a New Era as a Publicly Traded Company

By Grant Barber, Chief Financial Officer

I am delighted to have had the opportunity to join Hughes

early this year at such an exciting and eventful period in the company’s history. After several corporate transactions, Hughes emerged in March as a publicly traded company, trading on the over-the-counter bulletin board (OTC) under the symbol HGCM. Our major shareholder, Apollo, owns approximately 66 percent of our stock.

I believe that our public status affects business in a very positive way. In fact, we are very proud to have delivered a very strong first quarter as a public company with $197 million in revenue, a 10 percent increase over the same period last year. A profitable first quarter of 2006 has gotten us off to a great start, and our status as a separate public company enables us to truly show the world what we can do.

In preparation for our bond offering, CEO Pradman Kaul and I went on a whirlwind coast-to-coast U.S. tour in March and April, presenting the Hughes story to over 100 accounts. Thanks to all of the

continued on page 2

Talk, Listen, Learn

� Channels / Summer 2006 / www.hughes .com

Executive Cornercont inued f rom page 1

Published quarterly by Hughes Corporate

Communications Department.

Eric Gann, Editor.

Channels may also be found online at

www.hughes.com. Click on News and

select Channels Newsletter.

Correspondence is invited and should be

directed to:

Arunas Slekys

E-mail: [email protected]

Telephone: 301-428-5502

Fax: 301-601-4107

Hughes

11717 Exploration Lane

Germantown, MD 20876 USA

About Hughes

Hughes Network Systems, LLC (HUGHES)

is the global leader in providing

broadband satellite networks and

services, bridging the best of satellite

and terrestrial technologies. HughesNet

encompasses all broadband solutions and

managed services for large enterprise,

government, small businesses, and

consumers. Hughes has shipped more than

one million systems to customers in over

100 countries and its broadband satellite

products are based on the IPoS (IP over

Satellite) global standard, approved by the

TIA, ETSI, and ITU standards organizations.

Headquartered outside Washington, D.C.,

in Germantown, Maryland, USA, Hughes

maintains sales and support offices

worldwide. Hughes is a wholly owned

subsidiary of Hughes Communications, Inc.

(OTCBB:HGCM). For additional information,

please visit www.hughes.com.

Special thanks to our contributors:

Grant Barber, Kathy Bell, Judy Blake, Bob

Buschman, Ken Cohen, Ann Edgeington,

Harry George, Dilbag Johal, John Kenyon,

Allen McCabe, Mary Phillips, Dan

Rasmussen, Rahul Savoor, Rob Shultz,

Arunas Slekys, Mike Wade, and Dave

Zatloukal.

©2006 Hughes Network Systems, LLC.

All Rights Reserved. HUGHES, HUGHESNET

and IPOS are trademarks of Hughes

Network Systems, LLC. DIRECWAY is a

trademark of The DIRECTV Group, Inc.

All other trademarks are the property

of their respective owners.

I am pleased to say that a number of events have put Hughes higher on the external radar screen. Starting with the purchase from DIRECTV® and the rights offering, followed by the bond offering memorandum and road show, the company went on to make its stock available for public trading and launch new branding initiatives. These events have significantly increased our visibility with a much larger audience, including shareholders, analysts, bondholders, employees, and customers.

Looking to the future, a key goal is to build long-term sustainable, profitable growth. Continued development of our international markets and the successful management of SPACEWAY will also be important building blocks to Hughes’ future. We look forward to expanding our domestic leadership in the consumer and small business

segments as well as the North American network and services business, and to continue to receive value from our mobile satellite and terrestrial microwave businesses.

Above all, nothing is more important than our people. The spirit and teamwork displayed throughout the company is second to none. I am very proud that Hughes has once again received workplace recognition with the 2006 ‘Workplace Excellence’ Seal of Approval for the State of Mayland from the National Work~Life Alliance. I would like to assure Hughes employees that the company is continuing its commitment to provide a great place to work and a challenging environment that encourages personal growth, professional development, and rewards. I don’t think the future has ever looked brighter.

people at Hughes who assisted in this process, we had a very crisp story about our market leadership, direction, and confidence in our future. As a result, the offering was a tremendous success. It was three times oversubscribed, which means that investors understood our story and were willing to invest in our future.

Consequently, we were able to increase the size of the deal from our original $375 million to $450 million at very attractive interest rates and fewer restrictions than our original bank debt. This has provided enough cash on hand to fully fund the significant expenditures required to build, insure, launch, and manage the SPACEWAY™ 3 satellite and provide additional cash for general corporate purposes.

�Channels / Summer 2006 / www.hughes .com

If it’s Thursday, Paul Hlavinka must be spending the day at T.J.Maxx. The Hughes

program manager is part of a new customer management initiative that focuses on proactive account management by pairing up Hughes sales managers and program managers to create a total, dedicated account team for each enterprise customer.

In the past, Hughes sales and program managers were not always paired up on a dedicated basis for a particular customer, which meant each worked with different points of contact, and inevitably with different priorities. While the program manager focused on fulfilling existing contractual obligations and dealt with day-to-day operational issues within the account, the sales manager focused on new opportunities and longer-range initiatives. But Hughes shifted its approach earlier this year to ensure that teams made up of both groups work collaboratively and exclusively on the proactive management of customer accounts.

This tag team approach means both sides are better informed and can deliver an overall higher quality of customer care. Sales managers know about implementation progress, the emergence of new applications that could affect the network, and any program challenges or issues

the customer may have. At the same time, program managers are better aware of what sales managers are working on in other parts of the customer’s business, such as promoting ancillary Hughes products and services or plotting a path for a network upgrade or expansion.

“With this greater exchange of communication between sales and program management, we’re more in lockstep with what’s going on within the customer’s business and the challenges and requirements they are facing, helping us to respond more quickly,” said Harry George, vice president of sales, North America for Hughes. “With

a dedicated sales and program management team, we can ensure greater, continuous customer satisfaction, making the program a win-win for customers and for Hughes.”

The arrangement results in a number of benefits for both

customers and Hughes. It creates more effective communication with the customer, strengthens the Hughes presence at the customer site, and helps to ensure there are no surprises. Creating a partnership relationship with the customer, the program also helps to identify

issues sooner and enable faster problem resolution. The approach has proven particularly beneficial as customers move towards more Web-based applications, which often stress legacy narrowband networks. It also enables Hughes and the customer to more proactively plan for additional legacy network capacity and

to develop an upgrade path to broadband HughesNet Managed Network services, which better accommodate growing traffic and applications requirements.

“As we take a more synchronized approach to our customer involvement, we can use the knowledge and insight we gain to provide better solutions to satisfy our customers—and even anticipate what those requirements will be,” said Dilbag Johal, vice president of program management, North America for Hughes.

The tag team approach allows Hughes to know the customer better and, what’s more, the customer knows that Hughes knows their company better. That’s why you may see program managers and sales managers like Hlavinka and George huddling together, sharing information, and discussing strategies—ensuring that the Hughes-customer team is a winning one.

A Winning TeamServing the Customer


Consumers expect a very quick stop when it’s time to fuel up at the local gas station. Most customers swipe a credit card, pump their gas, perhaps pick up a gallon of milk or a cup of coffee,

and move on in a matter of minutes.

Those customers don’t think a lot about the network that keeps operations running behind the scenes—from credit and debit card authorizations, to tank-level monitoring, to inventory management. But nothing is more important to BP Products North America than the efficient operation of its 14,000 stations nationwide. To help speed its millions of customers on their way, BP is now deploying HughesNet™ Optimized Network service to connect its retail locations throughout the U.S. HughesNet Optimized Network service, part of the suite of Hughes Managed Network Services, is a fully managed broadband offering that creates a seamless network service by using the most efficient and cost-effective technology available at each site—whether satellite or terrestrial.

The flexible HughesNet Optimized Network service enables enterprises to optimize their networks based on cost, technology, or performance. At company-owned/company-operated (COCO) sites, BP is deploying satellite as the transport of choice. For branded marketer sites, the industry’s term for franchise holders, the company elected to deploy DSL where it is available. Overall, the oil giant expects to deploy DSL at up to 35 percent of its 14,000 stores, with the remainder satellite-based.

The HughesNet managed service provides BP with transport-level services at each station, hub operations, network management and proactive monitoring. The solution also includes installation, field maintenance, and ISP-class services.

“The HughesNet Optimized Network service provides BP retailers with the ability to expand beyond just credit and debit,” said Dan Rasmussen, senior director of marketing, North America, for Hughes. “BP retailers can not only run back-office functions such as e-mail, inventory management, and tank-level monitoring, which help them to be more productive in running their stations. They can also expand into browser-based business applications and add new revenue-generating applications such as digital signage, branding, and music services.”

“BP has been a loyal Hughes customer for over 14 years, using our earlier thin-route PES system. Now, HughesNet Optimized Network service, with its blend of DSL and satellite, delivers BP a comprehensive, managed broadband capability from one trusted provider. Equally important, it is a flexible, reliable network that will facilitate a variety of new applications and initiatives for BP’s retail operations,” said Harry George, vice president of sales, North America, for Hughes. “The new network not only will help BP improve application performance, it will also create a more pleasant shopping experience—ultimately building customer loyalty.”

Implementation began in January 2006 and BP expects to have the network completely installed by summer 2007—helping to keep its operations in top form and speeding customers on their way.


Hughes creates a

seamless network by

using the most efficient

and cost-effective

technology available

at each site—whether

satellite or terrestrial.



Betty Gillespie loves her new hometown of Hebrew Springs, AK. But she was surprised to learn that her new

community does not offer the high-speed DSL Internet service that she had come to enjoy in her previous home in Naples, FL. Reluctantly subscribing to a dial-up Internet service, Gillespie not only found it painfully slow to use e-mail and the Web, she also realized that the sluggish service was affecting her ability to run her antique collectibles eBay business. Then Gillespie learned about HughesNet™ broadband satellite service.

Gillespie is not alone. An estimated 12 to 14 million homeowners and small businesses in the U.S. currently have no access to terrestrial broadband cable or DSL. This underserved market is spurring the rapid growth of high-speed Internet by satellite for consumers and small businesses.

HughesNet, formerly known as DIRECWAY®, is a high-speed satellite Internet service that

is available to everyone in the contiguous U.S. with a clear view of the southern sky. HughesNet provides individual users and small businesses a total broadband service including very high-storage e-mail, Web utilities, and a Web portal that can be customized to display news, weather, sports, and financial information. Subscribers can also use the portal

to check on their usage and manage their accounts.

“Even when households or small businesses have no access to terrestrial broadband cable or DSL, they should still have the opportunity to enjoy all the features of a full Internet service with

broadband speeds, no matter where they live in the country,” said Allen McCabe, assistant vice president of consumer and small business sales, North America for Hughes. “With HughesNet, people who choose to live in rural or suburban America can have the same kind of broadband capabilities, features, and support as those in the city.”

Available in six different service/pricing packages depending on individual needs, the

Closer Than You Think

“I love the speed.

I love the service.

If we ever move, we

are definitely taking

HughesNet with us.”

HughesNet service comes with a compact indoor modem and a small satellite dish (less than three feet in diameter), usually installed on the roof or an outside wall of a home or business.

HughesNet service is available through the Hughes Web site, in national stores such as Circuit City, Best Buy, and Radio Shack, and through sales agents such as large direct marketing firms or broadband aggregators and resellers. The service is also available through local, independent retail stores such as Access Point in Culpeper, VA, which offer sales, service, and installation. Currently averaging more than 10,000 new subscribers each month, HughesNet recently passed the 300,000 subscriber mark for consumers and small businesses.

Since starting her HughesNet satellite service, Gillespie can once again access the information she needs in seconds rather than minutes, eliminating the frustration of dial-up and enabling the swift communications required for a successful e-business. “HughesNet is a valuable part of our business and our lives. I love the speed. I love the service. If we ever move, we are definitely taking HughesNet with us,” said Gillespie.


SPACEWAY Countdown to

The Switch in the Sky

A new dawn is approaching in satellite communications. The Hughes next-generation SPACEWAY 3 satellite, scheduled for launch early in 2007, will be the world’s first commercial

spacecraft to feature on-board switching. This “switch in the sky” enables communications directly between customer sites in a single hop, without going through a central hub.

The first two SPACEWAY satellites, SPACEWAY 1 and SPACEWAY 2, are currently in service, providing video services for DIRECTV. When in operation next year, SPACEWAY 3, owned and operated by Hughes, will change the face of broadband satellite services, providing high-speed communications to a massive area in the Western

hemisphere—from Alaska to Florida, from Maine to southern California, and into Canada and South America.

Inside SPACEWAY

A look inside the SPACEWAY satellite reveals a dazzling array of complex and innovative equipment, somewhat bewildering to the untrained eye. But all those new chips and logic are only there because they translate into unprecedented advantages for delivering broadband services.

“When we started this

program, other companies

said that this satellite

couldn’t be built—that

the technology did not

yet exist.”


“The network operations control center and the satellite terminals were designed by a large team of Hughes’ best and brightest engineers,” added Buschman. “We built several hundred terminals that were used in our 30-day over-the-air tests and in our labs. And when the satellite is in orbit and in service, we anticipate building more than 10,000 terminals a month for installation all over North America.”

The building process continues as we go to press with this article—installing the uplink and downlink antennas, mating the two halves of the payload and bus, adding solar wings and deployable radiator panels—and the numerous other tasks and components that pull it all together. Full assembly by Boeing is expected during this summer, with delivery to Hughes in the fall. Later in the year, final preparations will begin to move the SPACEWAY launch platform out to sea in readiness for the big launch early in 2007.

Over-the-air Testing

In preparation for the much anticipated launch of SPACEWAY 3, Hughes

completed a month of rigorous over-the-air testing with SPACEWAY 2 earlier this year. Following complete testing in a lab environment, testing was subsequently conducted using the actual satellite in orbit, validating its IP broadband capabilities and setting the stage for the future success of SPACEWAY 3.

The Hughes test team, composed of more than 40 engineers and technicians, ran approximately 160 readiness tests over a 30-day period to ensure that everything works properly—from the transmission and switching systems, to the front-end systems and user interfaces for configuring the terminals and managing the network operations control center.

The successful completion of this over-the-air testing represents another critical step in the countdown to the launch of SPACEWAY 3.

What Makes SPACEWAY Different

On-board SwitchingThe most unique capability of SPACEWAY is that it can switch traffic on board. All conventional satellites today are basically reflectors and require a ground-based network center to route and switch traffic—a “double-hop” journey. SPACEWAY’s revolutionary on-board switching capability means that the satellite receives, processes, and routes traffic directly to and from customer locations without transmitting back and forth to a hub—a “single-hop” journey. On-board switching reduces delay, increases overall transmission efficiency, and enables point-to-point or mesh communications directly between two or more customer sites.

Signal ReconstitutionAnother unique capability is signal reconstitution. With today’s satellites, a signal is received from a ground terminal, amplified, translated to another frequency, and sent back down—errors and all. But SPACEWAY changes all that. Serving as an intelligent device, SPACEWAY re-modulates the signal, correcting any errors introduced on the way up. With uplink and downlink paths that are independent of each other and other unique capabilities, errors are not retransmitted when the signal comes back down to its destination.

Spot BeamsSPACEWAY also makes use of spot beams, creating energy efficiency and allowing frequency reuse. Its phased array antenna transmits spot beams directly where the traffic needs to go. Because a spot beam focuses all its energy on a very specific, narrow area, it makes more efficient use of the available satellite power. With 24 hopping spot beams, SPACEWAY can focus and concentrate the energy to specific areas as needed—enabling bandwidth-on-demand services—with smaller antennas and greater satellite efficiency.

Frequency ReuseSimilar to a cellular system that reuses frequencies throughout a coverage area, SPACEWAY will reuse frequencies across the coverage area, yielding higher effective capacity at a lower cost. SPACEWAY also incorporates a host of advanced techniques to mitigate rain fade—increasing or decreasing power as required in rainy or dry areas.

One Large BirdStretching 134 by 24 feet when deployed and weighing in at more than 13,000 lbs., SPACEWAY 3 will be one of the heaviest satellites lifted into a geosynchronous orbit. Manufactured under contract by Boeing, it will be launched by Sea Launch Co. from a modified oil rig platform located on the equator in the Pacific Ocean.

The SPACEWAY Crew

“Because of the many technological advances we designed into SPACEWAY, Boeing is one of only a few companies that could actually build it,” said Bob Buschman, vice president of the Hughes SPACEWAY group. “When we started this program, several other manufacturers said that this satellite couldn’t be built—that the technology did not yet exist. But Boeing took the challenge and built it.”


As businesses in all areas of the economy move more of their operations online,

they rely on a continuous flow of information to drive and support critical business decisions. Web portals, just-in-time inventory applications, and distribution centers must always stay available. In particular, browser-based applications have become critical to enable online transactions and vital communications between branch offices and headquarters. Enterprises simply cannot afford to allow a downed network to interfere with customer service or the flow of business. Not surprisingly, the need for a high availability network solution is what keeps many C-level managers awake at night.

But help is on the way. The HughesNet High Availability Network service employs both terrestrial and satellite communications to provide businesses an affordable, private network solution that ensures continuous, reliable service delivery via co-primary connection paths to each site. As a result, the HughesNet High Availability Network service yields a flexible, cost-effective alternative to more expensive, dedicated terrestrial-only solutions.

Conventionally, such solutions have involved multiple terrestrial network paths that may lie in the same trench or go though the same central office, creating a potential common point of failure. With the HughesNet High

The Affordable High Availability Network Service

The NetworkThat Keeps Going…

and Going…

Availability Network service, an outage in either the terrestrial or satellite path will automatically re-route applications to the other live path and allow business to keep functioning at full capacity. In addition, the offering includes policy-based routing, which allows applications to be assigned to whichever path delivers the best performance based on normal operation.

“The essence of our HughesNet High Availability Network service is that it combines co-prime access with a fully managed service, giving our customers the confidence of having a robust, flexible network that meets both availability and growth demands at an affordable price—all managed by a trusted partner,”

said Ken Cohen, assistant vice president of marketing, North America for Hughes.

Hughes has a long history of delivering managed network services. In fact, Hughes managed services were recognized by the Yankee Group in a 2006 report as having more locations under management than any other service provider in North America. Of 200,000 total locations at which the company provides management, 110,000 locations are receiving a complete managed service from Hughes.

By choosing the HughesNet High Availability Network service, CIOs will not only help keep their companies running, they may even sleep better at night.


Hughes Unveils Brands and Products in MoscowIn May, 126 participants descended on Moscow for Hughes’ fifth

annual Moscow Seminar which was held coincident with the Sviaz/ExpoComm 2006 conference and exhibition. Attended by

representatives of 62 companies from Russia and five CIS countries, including 15 key Hughes customers and more than 30 journalists, the event provided a lively forum to discuss market challenges, successes, and opportunities throughout the region.

The hot topic of the day was “HughesNet—Broadband Unbound.” Hughes executives introduced the new HughesNet service brand, followed by presentations on the latest HN and HX broadband satellite products and AIReach terrestrial wireless systems.

The event was marked by a contract signing for the Hughes Back-End Office Software System (HBOSS) between Alexander Danchenko, managing director of The DataGroup in Ukraine and Dr. Arunas Slekys, vice president and general manager of Hughes’ Russia/NIS business—the first sale of this comprehensive software system in the world.

Highlighting the event was a presentation on the world market for VSATs by Simon Bull, senior consultant with Comsys International, followed by executive speakers from major Hughes service provider customers throughout the region: Alexander Danchenko of The Data

Group in Ukraine, Ramazan Veliyaev of Delta Telecom in Azerbaijan, Murad Sofizade of JSC IPNet, and Sergei Tereschenko of Sky Altegro in Russia. They each spoke about their respective successes and the significant market opportunities for broadband satellite within Russia and throughout the region.

In addition to the summit, Hughes held its users’ group meeting, which was attended by 10 authorized regional service providers, to discuss a wide range of market development strategies and opportunities in various sectors, from distance learning to retail, to oil and gas. “The event sparked considerable dialog among participants about ways to grow their businesses, including candid discussions about how to best meet the needs of over 50,000 Russian towns and villages that currently have limited or no basic telephony services,” said Slekys. “Our collective challenge is to continue raising the awareness of the powerful advantages and benefits of broadband satellite throughout this vast developing region.”

10 Channels / Summer 2006 / www.hughes .com

HX Means High-quality Broadband for Smaller Networks

Providing broadband services to rural areas with limited terrestrial infrastructure or to far-flung operations such as maritime, cruise lines, and oil and gas exploration sites can be costly

and challenging. But it just got a whole lot easier with the Hughes HX System, a new broadband satellite platform introduced in June and designed as the affordable answer to delivering high-quality services in smaller networks.

“The HX System, which was designed specifically for smaller networks with a high QoS requirement, leverages the features and functionality of our popular HN System,” said Pradman Kaul, chairman and CEO of Hughes. “Particularly in rural areas where there is limited infrastructure, this system can bring broadband affordably to people who would otherwise have slow speeds or no connectivity.”

in a Small Package

In addition to state-of-the-art electronics and packaging, the key to the HX System’s affordability is its advanced bandwidth management features, which enable operators to efficiently allocate satellite bandwidth as a virtual pool. Rather than dedicating satellite bandwidth for specific usage, which can prove costly, the HX System provides an “IP cloud in the sky,” reallocating unused bandwidth among active users, while assuring bandwidth availability when and where it is needed.

In the past, landline or mobile operators may not have been able to justify building out networks to serve customers in remote areas, or as a minimum decided to outsource the satellite trunking of traffic. Now with the high-quality, low-cost HX System, operators can cost-effectively own and operate their own systems, however remote the area and wherever their customers may choose to live or work.

Big Punch

in a Small Package

11Channels / Summer 2006 / www.hughes .com

HUG membership, which is open to any Hughes enterprise customer, represents a cross-section of companies in a variety of sectors, including retail gas and convenience stores, restaurants, lotteries and entertainment. Governed by an elected board, the group includes Fortune 500 companies, more than 15 of which have been HUG members for over 10 years. This year, Rick Larsen from BP Products North America, Inc. was elected to serve as president for the next two-year term.

“Hughes is simply a member of HUG. The elected officials drive the users’ group,” said Zatloukal. “Hughes supports it in every way possible, but ultimately the members themselves define its objectives and success.” The HUG also works in cooperation with the Executive Advisory Council (EAC), a related group comprising C-level members who look at strategic business solutions.

HUG 2006The HUG 2006 meeting featured general sessions for Hughes to provide company updates, introduce the new HughesNet service brand, discuss topics such as program management and network operations, and demonstrate new technology, services, and products. But the real heart of the meeting resided in the roundtables where members could discuss common issues and success stories. Opportunities abounded for networking and sharing ideas among Hughes technical and business staff and their peers in customer organizations.

Inside the HUGcont inued f rom page 1

Behind Closed DoorsDuring the annual three-day meeting, the board conducts several private sessions, which are closed to Hughes participation. These sessions provide an opportunity to set the direction of

what the group wants from Hughes during the

meeting, and on the final day to

prepare a report of common issues and the direction it would like

Hughes to take during the coming

year.

Around the TableBecause Hughes enterprise customers represent a diverse population, their requirements can be very different. But there are two things they all agree on—the value of the HUG and the use of roundtables as the optimum means of sharing ideas. Roundtable discussions offer the opportunity for members to meet in small groups to discuss topics of common interest with a Hughes subject matter expert. This year’s roundtable topics, which were selected by members in a pre-conference survey, ranged from security and engineering support to field maintenance and regulatory issues.

The Stage for Innovative SolutionsThe annual HUG meeting also features a Hughes Tech Fair with live demonstrations of the newest products, services, and technologies. This year, the Tech Fair featured the introduction of the HughesNet service brand and three new services: High Availability Networks, Enhanced Network Management, and

Digital Media, which generated considerable interest among the membership.

HUGusa.org The HUG is much more than a single event. To keep the conversation going, it is important for the group to stay in touch throughout the year. Launched this year, hugusa.org is a blog that provides members a forum to continue discussions and gives Hughes an effective vehicle to provide updates in response to customer issues and ideas.

What Members Like About the HUG “The HUG event is one of the most important networking opportunities for HUG members,” said Rick Larsen, service delivery manager, retail, of BP and president of the HUG. “Not only do we have the top management from Hughes available for three days, but we have our peers from diverse

industries working towards a common goal—how

we can be better. HUG gives us

the opportunity to have open discussions on all facets of our very different

networks—what works well and

what doesn’t. And from those discussions

we are able to submit to Hughes a set of common improvements.”

“Members tell us that roundtables are hands down the best feature of the annual HUG meeting,” said Ken Cohen, assistant vice president of marketing, North America for Hughes and facilitator responsible for day-to-day interaction between the HUG and Hughes.

“They have also expressed keen interest in hugusa.org as a means of expanding the value of the HUG to more easily stay connected throughout the year.”

Driving Innovation After the last closed session of the annual HUG meeting, the board presents Hughes with a set of issues and actions that it would like Hughes to address. From this report, Hughes develops an action plan and communicates updates and activities. Based on input and direction from the HUG,

the company has brought products and services

to market that respond directly

to the needs of customers.

“We heard loud and clear

that customers wanted a partner

who would deliver a set of managed

services,” said Zatloukal. “To not only provide a transport service, but also to manage it, to let them know when there are issues with their network rather than having to tell us. We listened and now are bringing out a whole suite of managed network services. Customers also told us they needed high availability, so we’ve created a solution that maximizes the advantages of separate transport systems—satellite and terrestrial. It’s the most comprehensive and diverse network solution available in the telecommunications industry.”

With their record of driving innovation and exerting a strong influence on Hughes’ service delivery strategy, it’s no secret that HUG members will keep on doing what they do best—talking, listening, and learning. For more information about the HUG, please contact us at 301-428-5848.

First Class MailU.S. Postage

PAIDGermantown, MDPermit No. 4413

11717 Exploration LaneGermantown, MD 20876 USA

n Hughes Honored with Industry Innovation Award: During its 2006 conference and exhibition in San Diego, CA, ISCe honored Hughes with its “Innovation Award” for the company’s outstanding accomplishments in bringing satellite services and products to enterprises, governments, small businesses, and consumers globally. “ISCe is one of the satellite industry’s top promotional organizations and we are honored to be this year’s recipient of its prestigious Innovation Award,” said Hughes chairman and CEO Pradman Kaul. ISCe is the premier U.S. West Coast annual conference and expo highlighting satellite-based services, applications, and innovative technologies for the commercial, civil, and military sectors.

n Good Ideas: Connecting Education and Technology: For over 10 years, Hughes has enjoyed a mutually beneficial relationship with the University of Maryland. In fact, in 1994, a research collaboration through the Maryland Industrial Partnerships (MIPs) program resulted in a joint patent for efficient transmission of IP traffic to and from a Ku-band satellite, paving the way for Internet access over satellite.

As part of the relationship, Hughes has provided the University of Maryland with grants, scholarship funds, graduate field project support, athletic sponsorships, donations of surplus engineering equipment, and numerous VSAT systems. John Kenyon, senior vice president of engineering for Hughes, fills several university leadership roles, including that of honorary fellow of the Robert H.

Smith School of Business, chairman of the Board of Advisors for the HYNET (Hybrid and Satellite Networks) Center of the Clark School of Engineering, and member of the Board of Visitors for the Computer, Mathematics, and Physical Sciences college. And since 1995, Hughes has recruited over 400 students from the University of Maryland to join its team of innovative engineers and business people.

n One Million VSATs: In May, Hughes announced that it had shipped its one millionth satellite terminal earlier this year, marking a major milestone in the global very small aperture terminal (VSAT) industry, which Hughes pioneered in the mid-1980s when it shipped the first VSATs to Wal-Mart. Customers of HughesNet solutions and services include many of the world’s leading companies, spanning a wide range of vertical sectors from retail to oil and gas, automotive, banking, and entertainment, as well as government and global organizations. Today, over 300,000 consumer and small business subscribers throughout the U.S. enjoy the benefits of HughesNet high-speed satellite Internet access.

n Bridging Communication Gaps at CommunicAsia 2006: In June, Hughes announced its new HX platform for high-QoS, smaller networks and presented its family of HN7000S broadband satellite routers at CommunicAsia 2006 in Singapore. Dave Rehbehn, senior director of marketing at Hughes, presented “Bridging Communication Gaps with Satellite,” a conference session

that explored the expanding role of satellite access to unify broadband IP services by filling the broadband “holes” where terrestrial services cannot go. In addition, Hughes exhibited a full range of products at its exhibit stand and hosted a breakfast seminar for approximately 55 service provider customers in the Asia/Pacific region.

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A Publication of Inside Executive Corner the HUG knowledge, ideas, and experience to help Hughes better meet customer needs and help customers get the most out of Hughes products and