In a rare moment of candor that aligns with current realities in the satellite broadband market, EchoStar CEO Hamid Akhavan called SpaceX’s Starlink “the biggest potential near-term challenge” his company faces as it gears up to resume selling consumer Internet services via its Hughes segment after a nearly two-decade hiatus. The comment, given during an investor presentation, highlights how swiftly low Earth orbit systems have changed expectations for performance, pricing and scale — and how legacy providers in geostationary orbit are re-calibrating their strategies.
A rare public concession
Akhavan labelled SpaceX the “undisputed leader” in satellite connectivity and he supported that assertion with an unusual strategic turn: EchoStar is strengthening its ties to SpaceX while turning its Hughesnet unit toward business customers. EchoStar has, in the past three months, agreed to sell SpaceX a 50MHz spectrum rights block in a cash-and-stock deal worth $17 billion and its Boost Mobile brand plans to use Starlink’s nascent direct-to-cell service to fill dead zones. It is a notable turnabout for a company that once largely owned consumer satellite internet — and one that makes sense.
EchoStar founder Charlie Ergen contributed one more surprising detail: the company approached SpaceX years ago to build satellites for it, and SpaceX turned down the work. What they have created, he says, is a daunting moat that crosses rockets with satellite manufacturing and network operations, all of it riding the unparalleled launch cadence Rocket Lab has developed in tandem with mass production.
Why Starlink pulled ahead
Starlink’s edge comes down to physics, scale and vertical integration. Starlink, which operates in low Earth orbit, typically offers latency in the tens of milliseconds, compared with around 600 or more milliseconds for a traditional geostationary link. That delay difference reimagines real world experiences (from video calls to cloud applications and online gaming) and has been a key reason rural consumers have sought wireline-like responsiveness.
Independent performance data has bolstered that shift. Speedtest Intelligence by Ookla data has consistently demonstrated Starlink’s median download speeds of more than 100 Mbps in many markets, which is significantly higher than incumbent satellite services, and latency on par with or better than ground-based broadband. For its part, the ability of SpaceX to launch often, iterate hardware fast and manufacture satellites at scale — capabilities it likes to trumpet in FCC filings and industry presentations — has allowed it to ramp up capacity quicker than others.
The payoff shows in adoption. The company says it has millions of subscribers around the world in consumer, aviation, maritime and enterprise markets. By comparison, Hughesnet’s customer base has shrank from about 1.56 million around Starlink’s public debut to some 819,000 more recently, according to company disclosures — one reason that EchoStar is counting on having Hughesnet pivot its focus toward enterprise, government and mobility customers.
Hughesnet’s pivot and the competitive squeeze
Akhavan said EchoStar expected these consumer headwinds going into this year and is now “over the 50% line” on enterprise revenue. The turn of the enterprise dovetails with where geostationary and hybrid networks continue to shine: managed services, backhaul, aviation and maritime connectivity and government and emergency response. There, strict service-level guarantees and specialized coverage can matter more than consumer-grade latency.
Competition isn’t just coming from LEO satellites. Fixed-device access from national mobile carriers has been growing rapidly, utilizing 5G technology and advanced LTE to cover underserved suburbs and rural fringe. This dual price-performance challenge has shrunk the market for conventional consumer satellite plans in North America.
Direct-to-cell raises the stakes
Ergen is predicting SpaceX will deploy “tens of thousands” more satellites as it scales direct-to-cell service using Starlink as space-based cell towers. Starlink has announced that it’s partnering with carriers like T-Mobile in the United States and others around the world — but so far, its initial text messaging facilities are growing more into voice and data features as the constellation and spectrum coordination develop. Industry groups like 3GPP already have standards to cover non-terrestrial networks themselves, and the FCC has been tweaking rules for space-based cellular — tailwinds for providers who can move fast.
And the spectrum deal with EchoStar affords SpaceX more flexibility for those cellular ambitions, while giving Boost Mobile a differentiator in remote coverage. It’s an odd but fitting alignment: a former consumer satellite giant offering assets to the company that upended it.
The market outlook
Analysts from firms like Euroconsult and Northern Sky Research have long contended that when it comes to LEO economics, achieving cost-competitiveness is the result of a relentless launch cadence and executing with satellite production efficiencies. The integrated approach of SpaceX — launching, spacecraft, terminals and network software — takes those constraints head-on. Rivals, including Amazon’s Project Kuiper and Eutelsat OneWeb, are building capacity and partnerships of their own but face a moving target as Starlink densifies coverage and rolls out new services.
For Hughesnet, winning in the next act probably looks like doubling down on segments where GEO and hybrid architectures deliver differentiated value, while partnering strategically in areas — including direct-to-cell – where LEO is essential.
Akhavan’s recognition doesn’t close the contest; it repackages it. SpaceX might have the edge in satellite internet right now, but it’s a dynamic, capital-intensive market that is strongly influenced by spectrum access and regulatory guardrails — from bodies like the FCC and the ITU — when it comes to practical operations. The firms that prevail will be those who can calibrate technology, go-to-market and policy at the speed of orbit.