Steve Mehs
12-16-02, 03:23 AM
Hughes Electronics said it will pull the plug on DirecTV Broadband's terrestrial high-speed Internet business in 90 days.
The company said it will work toward transitioning existing customers to alternative service providers during that time. The business, based in Cupertino, Calif., was acquired by Hughes in April 2001 and serves approximately 160,000 customers with its DirecTV DSL service.
As for its DirecWAY satellite broadband offering, Hughes said it will continue the service, which has about 160,000 customers. The company also said it will continue adding new DirecWAY customers, but will not increase the subscriber base aggressively in the near term to avoid cash requirements associated with subscriber acquisition costs.
Hughes and DirecTV said they will explore other strategic relationships that would allow the companies to offer future broadband services via both terrestrial and satellite.
"Hughes and its subsidiaries have worked steadily over the past months to improve our businesses in anticipation of the merger with EchoStar," said Jack Shaw, Hughes president and CEO. When the merger agreement was terminated last week, "we promised our shareholders and customers that we would move quickly to strengthen the profitability and efficiency of our company. This decision by DirecTV Broadband is the first of those moves," Shaw said.
Roughly half of DirecTV Broadband's 400 employees were notified of layoffs Friday, with a minimum of 60 days notice during which time they will continue to be paid, followed by receipt of a severance package. The remaining employees will work with customers during the approximate 90-day transition process and to wind down business operations, Hughes said.
From SkyReport (http://www.skyreport.com/skyreport/dec2002/121602.shtm#two) (Used with Permission)
The company said it will work toward transitioning existing customers to alternative service providers during that time. The business, based in Cupertino, Calif., was acquired by Hughes in April 2001 and serves approximately 160,000 customers with its DirecTV DSL service.
As for its DirecWAY satellite broadband offering, Hughes said it will continue the service, which has about 160,000 customers. The company also said it will continue adding new DirecWAY customers, but will not increase the subscriber base aggressively in the near term to avoid cash requirements associated with subscriber acquisition costs.
Hughes and DirecTV said they will explore other strategic relationships that would allow the companies to offer future broadband services via both terrestrial and satellite.
"Hughes and its subsidiaries have worked steadily over the past months to improve our businesses in anticipation of the merger with EchoStar," said Jack Shaw, Hughes president and CEO. When the merger agreement was terminated last week, "we promised our shareholders and customers that we would move quickly to strengthen the profitability and efficiency of our company. This decision by DirecTV Broadband is the first of those moves," Shaw said.
Roughly half of DirecTV Broadband's 400 employees were notified of layoffs Friday, with a minimum of 60 days notice during which time they will continue to be paid, followed by receipt of a severance package. The remaining employees will work with customers during the approximate 90-day transition process and to wind down business operations, Hughes said.
From SkyReport (http://www.skyreport.com/skyreport/dec2002/121602.shtm#two) (Used with Permission)