Starry sets sights on profitability

Nearly a year after Starry emerged from bankruptcy as a private company, the fixed wireless access (FWA) specialist is just months away from achieving profitability, says CEO Alex Moulle-Berteaux.

Amid a restructuring process that significantly cut operational and capital costs, Starry set a plan last year to turn that corner within a period of 12 to 18 months.

"We're on track and within a few months now of reaching that point," Moulle-Berteaux said this week in an interview. Starry is in position to turn that financial corner sometime in early 2025, he said.

Once the company hits that milestone, Starry intends to set its sights on new capital and new investments and "to get the company into growth mode again," Moulle-Berteaux explained. "What's exciting is starting to think about how you build profitable expansion," he added.

ARPU growth, commercial services launch

Starry will focus on a set of key areas to drive growth, including adding subscribers, boosting average revenues per user (ARPU) and a foray into business services.

The company aims to drive ARPU higher partly through an ongoing speed upgrade that's been underpinned by updated software and hardware. Leaping ahead of its 200 Mbit/s and 300 Mbit/s service levels, Starry now offers downstream speeds up to 500 Mbit/s across all its markets. It has also introduced 1-Gig speeds in some areas and intends eventually to offer those speeds across most, if not all, of its footprint.

Related:Starry sizes up speed upgrades, sub growth as it exits Chapter 11

Thanks to the availability of faster tiers and customers' willingness to upgrade to them, Moulle-Berteaux estimates that Starry's ARPU has risen about 45% from its IPO days. As a point of reference, the company's ARPU was about $33.19 back in the fall of 2022.

Starry is now solely focused on serving multiple-dwelling units (MDUs). It offered service to single-family homes for a time in Columbus, Ohio, but stopped after it exited that market in June 2023. As such, Moulle-Berteaux doesn't view Starry as a head-to-head competitor to FWA offerings from the likes of Verizon and T-Mobile, but he acknowledges that their presence "has had an impact on incumbent pricing."

To stay price competitive, Starry is offering a 200 Mbit/s plan at promotional prices in the range of $30 to $40 per month. "We're continuing to stay flexible to ensure we have a great value proposition," Moulle-Berteaux explained.

Starry also has begun to test out a commercial services offering for small and midsized businesses as well as potential enterprise customers. Starry has been trialing its commercial offerings across all markets with live customers since February and expects to move forward with a full launch later this year.

Related:Starry turns to Chapter 11, will continue services in five markets

Privately held Starry doesn't disclose its financials, but Moulle-Berteaux said total revenues have been rising by more than 30% each year. That growth has been aided by the surge in ARPU, the company's ability to stabilize its subscriber base and the recent introduction of business service trials.

Starry has about 250 employees today, down from the 1,100 it had at its peak.

Focus on five markets

For now, Starry plans to focus on expanding within its five core service markets: Boston, New York City, Los Angeles, Denver and Washington, DC. In those areas, Starry counts about 3.5 million to 4 million serviceable households and has deployed service to about 500,000 units so far.

That gives Starry a sizable total addressable market. But the company hasn't taken market expansion off the table – it's just a matter of when.

"I do ultimately see market expansion in our future," Moulle-Berteaux said. "As we bring in more investment into the business we'll start to evaluate new cities."

When Starry was in heavy expansion mode in 2018, it was looking to offer service in nearly two dozen US markets.

Starry's subscriber base is still hovering around 80,000. It lost a few customers due to the shutdown of the Affordable Connectivity Program (ACP) but estimates that it has been able to retain more than two-thirds of them by moving them to different plans, including Starry 100 (100 Mbit/s down by Mbit/s upstream) for $30 per month and Starry Connect, a 30 Mbit/s service that costs $15 per month.

Starry is still evaluating what to do with the 24GHz spectrum it owns covering portions of states such as Arizona, Nevada, Ohio and Texas.