When you're a satellite internet provider facing cash problems, sometimes the best business move is pointing your customers toward your well-funded competitor. That's essentially what's happening with EchoStar Corp (SATS) and its HughesNet service.

Passing the Torch to SpaceX

According to an SEC filing submitted Friday, HughesNet will start referring customers to Elon Musk's Starlink satellite internet service. "The commercial agreements will also provide for a fee-based referral program that lets us refer existing HughesNet customers and new Starlink customers to SpaceX," the filing stated.

This arrangement follows EchoStar's recent $2.6 billion spectrum deal, though the filing didn't spell out the fee structure or exactly how much HughesNet stands to earn from these referrals. What it did reveal, however, was far more concerning for the company's future.

Cash Flow Troubles

Buried in the same filing was a sobering admission about HughesNet's financial health. The company disclosed that it doesn't "currently have the necessary Cash on Hand and/or projected future cash flows or committed financing to fund our obligations" for at least the next year. That's accounting speak for "we're running out of money."

EchoStar acknowledged it's "in active discussions with funding sources to raise additional capital and/or restructure our outstanding debt," but couldn't promise those efforts would succeed. The company didn't immediately respond to requests for additional comment.

Starlink's Budget Option

The timing is interesting given Starlink's recent move to capture more price-sensitive customers. The SpaceX subsidiary rolled out a new $40 per month plan called "Residential 100 MBPS" for U.S. customers. The offering includes free installation and unlimited upload speeds, though download speeds are capped at 100 Mbps.

That pricing makes Starlink increasingly competitive in the satellite internet market, which might explain why HughesNet sees more value in collecting referral fees than trying to compete directly.

SpaceX IPO Speculation

Meanwhile, Musk dropped hints about potentially taking SpaceX public during Tesla Inc. (TSLA)'s shareholder meeting earlier this month. "Maybe at some point SpaceX should become a public company," he told investors. That would be a significant development for the space industry and give retail investors direct exposure to both SpaceX's rocket business and its growing Starlink subsidiary.

Price Action: SATS shares fell 3.69% to $67.40 at the end of regular trading on Friday, but recovered nearly 1% to $68.05 in pre-market trading.