Hughes sorry now? Broadband firm closes

US pay-TV company Hughes Electronics is to close its broadband internet service, which had been accruing massive losses after the company failed to overcome the competition in the marketplace.

DirecTV Broadband has been running at a loss with just 160,000 customers and was expected to announce losses for fiscal 2002 of around $110m.

The collapse of a proposed $16bn merger between Hughes' DirecTV unit and Echostar sounded the death-knell for the failing venture, which Hughes' says it has now been forced to close. Regulators opposed the Echostar deal because it would have created a business which controlled around 90 per cent of the US cable/satellite pay-TV market.

In August 2001 GM-owned Hughes was the subject of competing bids from Echostar and Rupert Murdoch's Sky empire, the latter of the two bidding $32bn at the time.

DirecTV Broadband was intended to offer US homes a high-speed internet and pay-TV all-in-one package - similar to the offerings of Telewest and NTL in the UK - but the unit failed to wrest market share away from other providers.