Hughes exec says market for state gov broadband, SD-WAN services about to ‘explode’

Hughes Network Systems scored a multi-year contract to provide managed broadband and SD-WAN services for the Texas Department of Information Resources, marking the company’s latest success as it works to lock in more contracts with state governments.

Tony Bardo, AVP of government solutions at Hughes, told Fierce states have hitherto typically handed out a single award for each services contract, with those usually going to an incumbent operator. However, he said the tide is shifting as more states have begun doling out awards to multiple vendors. This, Bardo said, opens the door for more competition from the likes of companies like Hughes.

“These state contracts are just now beginning to emerge and add vendors and add choice and options,” he said. “The SD-WAN and the managed broadband network market in the state government is about to explode, I think.”

Hughes got its foot in the door as one of three winners of a state managed network services contract with Pennsylvania in 2018. Bardo said it also has contracts in place with Massachusetts, Virginia, Oklahoma, Washington State and Colorado. The company’s indefinite delivery/indefinite quantity contract in Texas has an initial four-year term.

“I would like to get 50 sets of contracts and we’re working on it,” he said. “The list is growing as we speak. New Jersey just issued an RFP and we’re responding to that…and we’re also doing a North Dakota procurement right now.”

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While satellite service might be the first thing most people think about when they hear the name Hughes, Bardo said it is able to provide managed broadband over cable, fiber, wireless and fixed wireless infrastructure as well by leveraging its ecosystem of more than 400 partners.

“Basically a customer gives us a number of sites and we figure out what’s the best transport – and it usually always includes a partner of ours – and then we provide this information to our customer and say here are the choices you have,” he explained. “Do you want to choose by speeds, by economics, by price, by latency?”

The shift on the state level appears to mirror changes the federal government made to its own telecom procurement process. The current Enterprise Infrastructure Solutions (EIS) program allows multiple task orders to be made from a single solicitation.

Hughes is especially looking to capitalize on opportunities around SD-WAN as more states follow another federal government trend and look to update their legacy network infrastructure. The company ranked number two behind AT&T on Vertical Systems Group’s U.S. Carrier Managed SD-WAN Services leaderboard for 2020. It also made it into the Challenger Tier of the mid-2021 Global Provider Carrier Managed SD-WAN Services leaderboard. The Challenger Tier includes players with site share between 1% and 5%.

There’s plenty of money to be made. Omdia recently predicted SD-WAN revenue will hit $5.5 billion in 2025.

It is unclear just how much government services contracts contribute to Hughes’ revenue. A division of Echostar, Hughes generated $491.2 million in revenue in Q4 2021, with 65% attributable to the consumer segment and 35% coming from enterprise customers.