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HNS readies broadband satellite service

Apparently undaunted by the potentially shifting terrain the company currently inhabits, Hughes Network Systems is moving full speed ahead with plans to launch a satellite-delivered broadband service this fall.

HNS is a unit of Hughes Electronics, which is currently coveted by both Rupert Murdoch's News Corp. and EchoStar for its DirecTV operation. DirecWay, the service HNS intends to roll out this fall, would enable delivery of DirecTV and the broadband service through the same antenna. DirecWay will require a $500 receiver and a monthly subscription fee to be determined - but probably in the $60 range.

HNS is touting its partnerships with America Online, EarthLink, Pegasus and Juno in hyping the potential for DirecWay - and a subsequent, faster iteration to be dubbed SpaceWay. It's in a trial launch mode with DirecWay, according to Paul Gaske, executive vice president and general manager of Hughes Network Systems, who claims the service enables a 2 kbps data download rate.

A multi-faceted media campaign, including some TV spots, national magazine ads and local print ads will promote the service. HNS projects a subcriber base of 200,000 customers - its break-even point for the service - within the first year of operation.

Speaking to analysts in New York on Wednesday, HNS chairman and CEO Pradman Kaul expressed confidence in his HNS unit surviving a transition in ownership. But he acknowledged he couldn't predict the future, saying, "We'll see what happens." - Richard Tedesco