Starry CEO: Customers “Couldn’t Give Two Hoots” About Fiber

Starry emerged a few years as a fixed wireless broadband provider targeting large multi-dwelling units (MDUs) and has had considerable success in that market, averaging 25% take rates within the first year, when the company aims to reach payback on its investment. The company developed its own technology, which is rather different from that of other fixed wireless providers in that it can use coaxial distribution infrastructure within a building to distribute service. Not surprisingly, 65% of customers cut their cable service to go to Starry. When considering whether to deploy service to a building, the company avoids MDUs where an overbuilder offers service. (A typical overbuilder would be one of the Astound companies.) The building may already have an incumbent cable provider and an incumbent telephone company. But “whether the incumbent ... has fiber is irrelevant,” said Starry CEO Chet Kanojia. His view is based, at least in part, on fiber economics and on mushrooming consumer demand. Starry is seeing consumption increase 30% per year and expects that trend to continue. As a result, he said, “it’s near impossible for a new fiber build to justify [charging] anything less than $90 in ARPU [average revenue per user] [per month] at a 40-ish percent take rate.” If the incumbent isn’t going to get a 40% take rate, it has to price the product at around $130 to $140 a month, which is considerably more than what Starry charges. And on the performance front, he said Starry offers speeds up to a gigabit per second (1 Gbps).