(Credit: Yingna Cai via Shutterstock)
Hughesnet has lost over half of its broadband subscribers since December 2020, right around the time SpaceX’s Starlink began serving US consumers.
Hughesnet subscribers were at 681,000 on March 31, according to a first-quarter earnings report from the satellite internet service’s holding company, Hughes Satellite Systems Corporation. That’s a huge drop from the 1.56 million Hughesnet had in December 2020, of which about 1.19 million were US customers, including retail and enterprise users.
Since then, Hughesnet has lost about 100,000 subscribers each year. The trend continued in Q1, with the subscriber count decreasing by about 20% year over year from 853,000.
(Credit: Hughes)The quarterly report also reiterates that “We currently do not have the necessary cash on hand” to pay off debts, leading the company to warn that “substantial doubt exists about our ability to continue as a going concern.” In Q1, Hughes reported a net loss of $7.6 million, with revenue continuing to shrink year over year.
This comes as Starlink has been offering significantly higher speeds and unlimited data. In Q1, US Hughesnet users were receiving median download speeds of 48.55Mbps while Starlink customers were getting 127Mbps, according to Speedtest.net parent Ookla.
(Credit: Ookla)Hughesnet also offered cheaper plans starting at $40 per month for new customers. However, SpaceX has been even more aggressive with perks and discounts for its Starlink Residential and Roam plans, including a short-term $29-per-month deal. The approach has been competitive enough to lure customers away from a traditional ISP based in Virginia.
That said, SpaceX is partnering with Hughesnet’s parent company, EchoStar. Last year, the companies reached two deals totaling $20 billion in cash and stock for SpaceX to use EchoStar’s radio spectrum to bolster its smartphone-focused cellular Starlink Mobile service. In return, EchoStar's Boost Mobile will get access to Starlink Mobile, giving customers a way to receive satellite connectivity in cellular dead zones.
As part of the deal, Hughes also revealed the companies had agreed to a “fee-based referral program that lets us refer existing HughesNet customers and new Starlink customers to SpaceX.” EchoStar later disclosed it could receive up to two months of Starlink sales revenue from each conversion.
EchoStar also offers Starlink and installation services through its Dish Network, Boost Mobile, Sling TV, and OnTech businesses. But so far, Hughesnet hasn’t done the same. The latest quarterly filing also doesn’t mention the fee-based referral program.
EchoStar and Hughesnet didn’t immediately respond to a request for comment. But back in September, EchoStar's former CEO Hamid Akhavan noted that Hughesnet was pivoting toward enterprise customers after reaching the spectrum deal with SpaceX. "First of all, we think that SpaceX is the undisputed leader in the marketplace in terms of connectivity for internet today using Starlink," he added in an investors presentation.
Last July, SpaceX revealed the company is serving over 2 million active Starlink customers in the US. Globally, the service has grown to over 10 million active users.