While Starry's 5G-based broadband service isn't a national competitive juggernaut by any means, the company is starting to become a thorn in the side of cable and telco providers in markets like Boston, according to a fresh report on the startup from MoffettNathanson analyst Craig Moffett.
Starry has largely targeted apartment buildings and other multiple dwelling units rather than single-home residents in a handful of markets. So far, that local, focused strategy appears to be working.
"By any standard, Starry is succeeding. Their subscriber base is growing 10% per month," Moffett explained in a report based on a meeting last week with Starry founder and CEO Chet Kanojia. "And by all indications, their longer-term expectation of taking close to 30% of the addressable market in cities where they launch service is an attainable goal. Still, by our estimate, they are the better part of a year away from reaching 1/10th of 1% national market share."
Boffo in Boston
Starry's deployment in Boston is the oldest, biggest and therefore best example of what it might be able to pull off in other US markets. Starry believes it could capture about 15% of the overall Boston market based on MDUs alone, Moffett said, noting that Starry is on a path to serve about 800,000 homes passed in Beantown.
Kanojia relayed that Starry's service is available in about 70% of buildings in its Boston footprint, capturing 27% to 30% share on average where it does have a presence. And it's doing so as the fourth entrant in the market behind Comcast, RCN and Verizon/Fios. In Cambridge, where Starry faces off only against Comcast, Starry's share has surged to between 35% and 37%, Moffett said.
The pandemic has been a mixed bag for Starry. It had its best quarter ever in Q1, but had to scale back in Boston temporarily, running at about 60% of pre-virus expectations because some building owners are reluctant to grant access to techs, Moffett said. But it has not seen that sort of impact in other early markets, such as Washington, Denver and Los Angeles.
Starry's grand, but slow rolling ambitions
Starry is nowhere near a national provider and the anticipated pace of its expansion has not met the company's initial expectations. For example, Starry conceded late last year it would not meet its 2019 goal of expanding service to 22 markets.
After an initial focus on Boston, the company has launched in parts of Los Angeles, New York City, Denver and Washington, and, according to Moffett, is nearing service launches in Reno and Las Vegas. Meanwhile, Starry recently won 200MHz of 24GHz spectrum in 53 primary economic areas across more than 100 cities.
"[S]o they have undeniably grand ambitions … Still one must concede that this is slow going," Moffett wrote. He estimates that Starry could end 2020 with about 100,000 subscribers, still a "drop in the bucket" in a nation of 120 million households.
And that's still the general case for 5G fixed wireless. Moffett put out a competitive broadband report last week that sized up different competitive cohorts, but did not include 5G fixed wireless broadband. "That omission was necessary because, despite years of effort, the market share of fixed wireless broadband is still too small to measure," he reasoned.
But that doesn't mean he's bearish about fixed wireless's prospects. Moffett points out that it takes a lot of time and money to stand up a scaled broadband competitor of any kind. He noted that Verizon Fios, despite billions of spent capital, has failed to get out of the "low single digits of national market share," and that Google Fiber has failed to be even that successful with its FTTP and fixed wireless efforts.
Moffett says he remains optimistic about Starry's prospects. But he acknowledges that even fixed wireless companies with good technologies and business models "are slow to make a dent in America."
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- Google uses wireless to expand fiber in Austin
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— Jeff Baumgartner, Senior Editor, Light Reading