Starlink Pressure: Satellite Operator Hughes Files for Bankruptcy

15:56 / 04.08.2026·22·Technology

The prominent US satellite internet operator Hughes, part of EchoStar, has been left in financial distress in recent years, unable to withstand growing competition from low-Earth-orbit systems, particularly Starlink. According to ixbt.com, the company has officially filed for Chapter 11 bankruptcy protection in the US to meet its obligations and restructure its debt burden. Ixbt.com reports this.

According to the data, Hughes’s subscriber base shrank sharply over the past year, with the number of users falling by approximately 21.7 percent to 641,000. The main cause of the company’s crisis is considered to be the technical limitations of traditional geostationary satellites.

Technological Lag and Competition

Experts explain that the geostationary satellites used by Hughes orbit at an altitude of approximately 36,000 kilometers above the Earth’s surface. While this provides broad coverage, signal latency, or ping, is nearly 600 milliseconds. By comparison, low-Earth-orbit networks such as Starlink operate with latency of 20–40 milliseconds and approach the speeds of terrestrial broadband internet.

Robert del Genio, the company’s restructuring director, said the advantage of low-Earth-orbit operators is long-term in nature. These networks are constantly expanding their coverage while lowering service prices. Moreover, Amazon plans to launch its own low-Earth-orbit network for commercial purposes in the near future, which is expected to intensify competition further.

Future Plans and Financial Position

However, the bankruptcy proceedings will not affect all of the company’s structures. Hughes’s international divisions will not undergo this process, and customer service will continue without interruption. As of August 3, the company was unable to pay $1.5 billion in debt. After losses in the consumer market, it intends to focus on corporate, government, and defense customers.

Hughes currently holds a portfolio of $1.5 billion in contracts with commercial airlines and US defense agencies. The operator is also continuing to invest in ground stations for low-Earth-orbit systems and flat-panel satellite antennas, which is expected to help it adapt to new market conditions.