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Hughes drops wireline broadband

Sun, 12/15/2002 - 7:00pm
Duffy Hayes

DirecTV parent Hughes Electronics Corp. will shutter its high-speed Internet business, which had been offering wireline DSL service under the DirecTV Broadband moniker. The company said that it would quit offering DirecTV DSL, and would transition more than 160,000 subscribers over the next 90 days to other providers.

Hughes' DSL business began in April 2001, when the company purchased the Telocity DSL service and all of its customers. While the business did grow at a decent pace-doubling year over year-the shift in the market for telecom services over the past 24 months made the business ultimately unprofitable, Hughes said in a release.

Hughes officials also cited the recent collapse of the proposed merger between EchoStar and Hughes' DirecTV as a catalyst for the closure of DirecTV Broadband. In announcing the news, Hughes president and CEO Jack Shaw said that shutting down the DSL business was the first of many moves the company will make to fulfill a promise to shareholders to streamline the company in the wake of the EchoStar merger collapse.

Today, Hughes also delivers broadband to more than 160,000 customers via two-way satellite through the company's DIRECWAY service. Hughes said that it would continue to offer the DIRECWAY service, but said that it would not "increase the subscriber base aggressively in the near term to avoid the cash requirements from subscriber acquisition costs."

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