Satellite internet provider Hughesnet filed for Chapter 11 bankruptcy on Sunday night, citing increased competition from Elon Musk’s Starlink internet service.
The company has been hemorrhaging subscribers since Starlink burst onto the scene in 2020. At that point, Hughesnet had about 1.56 million subscribers. That number has since dropped to 641,000.
Starlink’s satellites operate roughly 342 miles above the ground in low Earth orbit, compared with over 22,000 miles for geostationary satellites like the ones Hughesnet uses. That lower altitude allows Starlink to provide faster speeds and lower latency to customers, an advantage that Hughesnet’s chief restructuring officer, Robert Del Genio, pointed to directly in a court filing Sunday.
“As LEO constellations have expanded and reduced costs for consumers, the Company’s competitors have directly entered markets that it historically served — offering a product that exceeds GEO broadband on the performance metrics that matter most to consumers: speed and latency,” Del Genio said.
A recent Ookla report found that Starlink delivered median speeds of 127 Mbps download and 21 Mbps upload, with a latency of 39 ms. Hughesnet recorded speeds of 49/4 Mbps with 674 ms latency. Latency that high would make things like online gaming or video calls impossible.
Hughesnet’s parent company, EchoStar, already submitted bankruptcy filings for two other companies in June: Dish Wireless, which operates the cellphone service Boost Mobile, and Dish DBS, which runs the satellite TV service Dish Network.
Last September, EchoStar sold $17 billion of wireless spectrum to SpaceX, which operates Starlink. Despite that influx of cash, Hughesnet says it still has $1.5 billion of debt maturing in August that it won’t be able to repay.
What does this mean for Hughesnet customers?
Hughesnet says there won’t be any change for customers anytime soon and that it will continue serving residential customers while shifting its focus to enterprise, government and defense businesses.
“There is no impact to customers. Hughes[net] is operating as usual, and we expect no disruption to your service as a result of this process,” a Hughesnet representative said.
While current Hughesnet customers might not be affected immediately, I’d recommend exploring other options in your area as soon as possible. No matter where you live, there are almost certainly better options available, including Starlink or even a 5G service like T-Mobile.
You can find every option available to you by entering your address in the FCC’s broadband map search. For more tips on shopping for internet, check out CNET’s buying guide and our review of the best internet providers.