Hughes' wireless Down Under - sham or cover up?

Apparently too good to be true, an ad appearing in Brisbane's Courier Mail offered high bandwidth Internet access via an -exclusive Hughes AXs card". Describing the services as faster than cable, and pricing the access at just AU$70 per month, the ad urged customers to call a 1300 number before March 15.

A company claiming to have affiliations with US-based Hughes Corporation, contracted an outsourced call centre to manage the calls, and collect contact details of interested parties.

Hughes Network Systems in the US has been owned by General Motors since the mid-eighties.

Broadband aficionados soon picked up on the offer, called the number and posted the ad on the Internet in an attempt to share the good news - then everything began to become unstuck.

Suspicions were aroused when it was discovered Hughes not only lacked a local office, but hadn't even managed to put up a Web site providing information about the offer or the company. The outsourced call centre found itself suddenly inundated with requests for information, as staff attempted to placate interested parties with promises that they would be provided with more details by the end of the week. Call centre general manager Anthony Partridge told ZDNet Australia that the centre would continue to respond to enquiries and collect details as long as its services were paid, pointing out that their services were paid for in advance.

-We can't comment on what is going on with the company that contracted us, all we can say at this stage is that under no circumstances has any money been taken, no credit card details have been processed," Partridge said.

Partridge told ZDNet Australia that as far as he was aware his company's services had been contracted by a genuine representative of Hughes Corporation.

However, Hughes Corporation today has moved to distance itself from both the ad and the offer.

-Hughes Network Systems in the US is in no way affiliated with the company calling itself Hughes, which ran the ad in Australia," a spokeswoman from Hughes in the US told ZDNet Australia. -We are currently preparing an official media statement to that effect."

Similarly, Ericsson to which Hughes is a supplier, is refusing to comment on the ad or wireless offer, although call centre staff were informing callers that the mobile telephony provider was some way involved.

Ericsson would say only that Hughes is one of its suppliers, refusing to provide any more details of their relationship or specify if they are aware of Hughes' alleged Australian operations.

However, a source close to the deal claims that Hughes-US is attempting to distance itself from Australian operatives because the initial idea of a soft launch through direct marketing was thrown off the rails after the ad appeared in the paper. Caught off-guard by an overwhelming response, Hughes became a victim of its own success having not organised an internal call centre, or even a Web site, where interested parties could go to verify the offer.

It is unclear at this stage who placed the ad in the paper, and how the response it has generated could have been so drastically under-estimated, however, the ZDNet Australia. source is pinning the problem on a lack of understanding of the Australian conditions, and poor market research.

-All the infrastructure is there to roll the offering out, but they might end up selling off the technology to save face," the anonymous source told ZDNet Australia.

Industry pundits are also concerned that the furore may see Hughes sell the technology and further limit broadband competition in the Australian marketplace.

At this stage Ericsson is deferring any comment to Hughes Network Systems, and Hughes is preparing an official comment.

For an update on Ericsson's response, click here.