Hughes Satellite Systems Corporation filed for Chapter 11 bankruptcy protection on Monday, with the intention of refocusing its operations around business-to-business, government, and defense customers amid a decline in consumer broadband subscribers due to competition.
According to bankruptcy filings, the company has approximately $1.5 billion debt that matured on Aug. 1 that it is unable to pay.
The company intends to continue serving its customers during the restructuring process.
Hughes appointed Robert Del Genio, senior managing director of FTI Consulting, as chief restructuring officer for this process. Del Genio said in a court filing that the bankruptcy is due to the broadband market transitioning from Geostationary Orbit (GEO) to Low-Earth Orbit (LEO), and the timing of the debt maturity. Del Genio cited the impact of SpaceX’s Starlink and Amazon Leo.
“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. “Competitors have achieved significant scale and coverage across North America and Latin America, competing directly with the company’s HughesNet service.”
The filing cites that HughesNet subscribers have declined about 22% over the past year to 641,000 broadband subscribers. “The company does not expect this trend to reverse,” Del Genio said.
HughesNet has lost more than half of its subscribers in recent years as Starlink service has grown. In mid-2020, HughesNet had more than 1.5 million subscribers.
Hughes has a fleet of six Geostationary Orbit (GEO) satellites — three Jupiter satellites and leases on three satellites: Eutelsat 65 West A, Telesat T19V, and EchoStar 105/SES-11.
The company reported $1.4 billion in revenue for the 2025 fiscal year, however net loss was $1.3 billion, due to consumer broadband business and an impairment charge.
Leadership plans to refocus the company around enterprise and government business, which is a growing share of the company’s current revenue. The company has a $1.5 billion contracted enterprise backlog including recent contract awards from commercial airlines and U.S. defense agencies.
“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,” Del Genio said in the filing.
According to the bankruptcy filing, Hughes recently initiated plans to lay off 400 employees.
Hughes COO Paul Gaske, who is set to retire, resigned from all director and officer positions on July 28. He will serve as a senior advisor to EchoStar during the transition period.
Parent company EchoStar Corporation and its other subsidiaries are not impacted, and the proceeding does not include Hughes’ international subsidiaries. Two other EchoStar subsidiaries — satellite TV business Dish DBS and Dish Wireless — are also in bankruptcy proceedings that began in July.
