PanAmSat inks deals with RealNetworks, US West

2 min read

PanAmSat Corp. (Nasdaq: SPOT) said Wednesday that it inked deals with RealNetworks, Inc. (Nasdaq: RNWK) and US West (NYSE: USW). The company also extended its deal with Hughes Electronics for the transmission of broadband content over its new satellite-based network.

PanAmSat unveiled its NET/36 network, a high-speed, bandwidth-intensive network that can broadcast IP video, audio and data simultaneously to digital subscriber line (DSL) providers, cable headends, Internet service providers (ISPs) and broadband wireless providers.

Shares in the communications satellite operator, which is 81 percent owned by General Motors (NYSE: GM) unit Hughes Electronics, closed at 62 1/2 Tuesday. Its stock has come to life again after a series of service problems and a profit warning kept it in the doldrums last year.

Shares in RealNetworks, a media delivery company, closed at 68 15/64 Tuesday. The stock saw a spurt of growth in January when it reported better-than-expected earnings in its fourth quarter and announced a stock-split.

US West, which is merging with Qwest Communications International, saw shares close at 73 11/16 Tuesday. Qwest (NYSE: Q) shares closed at 50 1/2.

For RealNetworks, the deployment of its broadband-enabled RealSystem G2 through NET/36's satellite network means it will be able to bypass Internet congestion and extend its global reach.

US West will use NET/36 for IP content delivery to its DSL and Internet subscribers. The deal will allow US West customers to maximize their high-speed connections and download video and audio.

PanAmSat also said Wednesday it will expand its role as a satellite service provider for DirecPC, which is the platform for AOL Plus, America Online's (NYSE: AOL) broadband network. The service is a result of a 1999 alliance between Hughes Electronics and AOL, in which the two companies agreed to jointly market a number of services, including AOL Plus via DirecPC.

PanAmSat also said it will spend up to $250 million over the next 2 years to deploy NET/36. The company expects it will be able to support about 3 million broadband video users by late 2002. PanAmSat said it plans to roll out NET/36 in the US and internationally during the third quarter of 2000. As part of the U.S. rollout, PanAmSat plans to buy about 1,000 satellite-enabled servers over the next 12 months.

PanAmSat competes with Comsat (NYSE: CQ), Itelsat, a consortium also known as the International Telecommunications Satellite Organization.