With Subscriber Counts Decimated by Starlink, Hughesnet Files for Bankruptcy

US satellite internet provider Hughesnet has filed for Chapter 11 bankruptcy after running low on cash and losing subscribers to Starlink.

Hughes Network Systems filed in a US bankruptcy court on Sunday, but the company notes it’ll continue serving its satellite internet customers during the restructuring period. 

“This reorganization will allow the Company to address its maturing secured and unsecured debt, strengthen its capital structure, and accelerate its ongoing transformation into an enterprise, government, and defense-focused business—all while continuing to serve its customers,” the company said. A court document adds 400 employees are being laid off when the company employed 1,275 people in total.

This comes almost a year after Hughesnet’s parent company, EchoStar, admitted that "SpaceX is the undisputed leader" in the satellite market thanks to Starlink. Hughesnet has lost over half of its subscriber base since Starlink first launched in the US as a beta in late 2020. 

In a Monday quarterly report, EchoStar also noted that its broadband subscribers had fallen to 622,000, a loss of 59,000 during Q2. “We continue to experience increased competition from satellite-based competitors and other technologies," it said.

A court document adds: "The Company does not expect this trend (the subscriber loss) to reverse. LEO (low-Earth orbit) satellite competition is structural, not cyclical, and the Company’s competitors continue to expand coverage and reduce costs."

"Looking forward, the Company’s management team and professionals are in the process of developing a multi-year business plan that is expected to shift the Company’s revenue mix from a consumer-dominated business to an enterprise and government-led platform, as those customers—which represented a growing share of 2025 revenue—are expected to become the predominant source of the Company’s consolidated revenue in the future," the document also says.

It’s possible that Hughesnet might try to convert its customers to Starlink through a referral program announced last year. The company was supposed to receive two months of service revenue per converted customer, but it looks like Hughesnet never pulled the trigger on the referral program. Instead, EchoStar’s other subsidiaries, including Dish Network and Boost Mobile, have been working to promote Starlink. 

Last year, EchoStar became a SpaceX partner after agreeing to sell its licensed radio spectrum to the Elon Musk-led company in exchange for cash and SpaceX stock. Despite the deal, Hughesnet has been warning that it faced outstanding debts and was running out of cash.

Chapter 11 bankruptcy means the company, along with various related firms under EchoStar, will try to reorganize under a court-approved plan. In the meantime, a regulatory filing says: “Hughes has sufficient liquidity to fund its operations in the near-term and will seek to use its existing cash as it works to right-size the Company’s balance sheet.”

As part of the restructuring, Hughesnet COO Paul Gaske has stepped down from all his executive positions at EchoStar, but will remain as a senior advisor. Robert Del Genio, a senior managing director of FTI Consulting, has been appointed as Chief Restructuring Officer.