Hughesnet, a satellite internet provider, has experienced a significant decline in its customer base since late 2020. According to a first-quarter earnings report from parent company Hughes Satellite Systems Corporation, Hughesnet has lost more than half of its broadband customers, dropping from 1.56 million subscribers in December 2020 to 681,000 subscribers as of March 31. The company is facing financial challenges, with a net loss of $7.6 million for the quarter and insufficient cash to pay down its debts.
The primary reason for Hughesnet’s decline in customers is performance. Data from Ookla shows that Starlink, a competing satellite internet provider, offers much faster download speeds in the US. Starlink users averaged 127 Mbps download speeds in the first quarter, while Hughesnet customers only averaged 48.55 Mbps. This performance gap, coupled with Starlink’s promotional pricing starting as low as $29 a month for residential service (compared to Hughesnet’s $40 entry-level plans), has made it difficult for Hughesnet to compete.
Interestingly, SpaceX, the company behind Starlink, and EchoStar, the parent company of Hughesnet, are partners in a $20 billion deal. This partnership allows SpaceX to use EchoStar’s radio spectrum to enhance Starlink’s mobile coverage, while EchoStar’s Boost Mobile receives satellite connectivity in areas without cell signal. There have been discussions of a referral program that would direct Hughesnet customers to Starlink, but it is unclear if this program has been implemented.
Overall, Hughesnet’s struggles highlight the competitive landscape in the satellite internet industry and the importance of performance and pricing in retaining and attracting customers. As Starlink continues to expand its coverage and improve its services, it poses a significant challenge to established providers like Hughesnet.