AVN.L Regulatory News (AVN)

26 Oct 2009 07:00



Date: 26 October 2009

On behalf of: Avanti Communications Group plc ("Avanti", "the Group" or "the Company")

Embargoed until: 0700hrs

Avanti Communications Group plc

£7.5m Contract Win and Strategic Partnership

Avanti Communications Group plc (AIM: AVN), the broadband satellite operator, announces a contract win and major strategic partnership with Hughes Network Systems, the World's leading supplier of satellite network services and equipment.

Hughes has purchased capacity and managed services using Avanti's Virtual Network Operator service on HYLAS over a ten year period to an initial value of £7.5m in order to continue to grow its own established European networks business with clients in sectors such as oil and gas and lotteries. It has also committed to sell HYLAS services, and give Avanti access to Hughes' very extensive distribution channels in Europe - which currently account for more than 35,000 customer installations. Hughes has a global market share in the provision of satellite networks to enterprise customers of over 50%. It operates its own Ka band satellite in the USA, but leases capacity elsewhere in the World. HYLAS will enable Hughes to extend its competitive advantage in Europe.

Avanti has purchased equipment from Hughes for use at the HYLAS network control centre, in line with capital budgets. Avanti has also secured a five year framework supply agreement enabling its 52 VNO customers around Europe to purchase Hughes' customer premises equipment (dishes and modems) at a market beating price. This market leading equipment enables end users to operate internet services at speeds of up to 10Mbps, and the attractive pricing enables Avanti's VNOs to provide service with a minimal customer installation charge.

David Williams, Chief Executive of Avanti, said:

"I am pleased to announce a deal of significant strategic importance to both companies. Hughes is overwhelmingly the global leader in satellite networks for enterprise customers and I am certain that they will be a powerful force in helping us to fill HYLAS quickly in Europe. Our capacity gives them a similar competitive advantage to that enjoyed with their own satellite in the USA. Furthermore we have secured a supply for our VNOs of the world's best customer premises equipment at a market beating price. This is fundamental in turning HYLAS into a mass market consumer broadband proposition and will have significant impact on our ability to sign more VNO customers leading up to the launch of HYLAS."

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About Avanti Communications

Avanti sells satellite broadband services to telecoms companies which use them to supply homes and businesses. 

Avanti's first satellite, called HYLAS is under construction and will be the first superfast broadband satellite launched in Europe. 

The market for 2Mb satellite broadband products in Europe is estimated at more than 70 million households. 

Avanti currently provides satellite broadband services to customers in Europe using leased satellite capacity which it will transfer to HYLAS on launch. 

The European Commission has set aside funding for rural broadband projects in 79 regions across Europe with a total value of EUR2.8 billion over the next five years. 

 About Hughes

Hughes Europe is the operating and sales organisation for the European market for Hughes Network Systems, with facilities in Germany, the UK, and Italy. Utilising its satellite hub earth station and network operations centre in Griesheim, Germany, Hughes Europe provides HughesNet® broadband satellite and terrestrial solutions to large enterprises, government organizations, and small businesses throughout the continent, both directly and through a growing family of value-added service providers. These networks support rapid, reliable transmission of data, voice, video and multimedia content. For more information, please visit www.hugheseurope.com.