StarBand Exits Bankruptcy

[silversurfer]

From our friends at SkyReport.com

StarBand completed the final stage of its emergence from Chapter 11 protection, announcing a new board of directors and securing an additional $7.5 million in financing as part of a new hardware supply agreement with its largest shareholder.

The company said its capital structure has improved with the conversion of about $113 million of bank debt to equity. In addition, about $90 million of debt to Gilat Satellite Networks will convert to equity and a $14 million post-emergence note.

StarBand said it retained about 92 percent of its customer base throughout the 18 months in Chapter 11. "This accomplishment and activity in the category by other future entrants demonstrate the long-term viability of the broadband satellite segment as the leading high-speed Internet connectivity choice for the 20 to 30 million households unable to receive DSL or cable modem broadband services," the company said.

StarBand filed for Chapter 11 bankruptcy protection on May 31, 2002.

 

[Stargazer]

Having 92% over an 18 month period is an 8% loss in customers, thats only about 5% a year of churn in which is MUCH less than what DirecTv or Dish Network gets in churn on their video service, but these two should probably not be compared since they are two different services, although both use satellite. Perhaps that has to do with no alternatives being available in those areas where those that have the StarBand service at, and with the large amount of money consumers/businesses have invested in the hardware in which would be less likely to churn as a result. Also most or all have to have credit cards to get the service.

I bet when the new services roll out (such as what Dish Network is coming out with in 2005) there will be much more churn due to wireless and broadband being rolled out into more areas and less cost the consumer will have in the product (free from what Dish Network has been saying). When a system is free there is less of an incentive to keep on, people are going to be more likely to switch providers with little or no investment in the system.