Platforms

Starry Connects With Cord-Cutters

Wireless broadband service free of data caps appealing to heavy OTT video users 1/15/2018 8:00 AM Eastern

Starry, the 5G-facing wireless broadband service that taps into millimeter wave spectrum, hasn’t been on the market for long, but it appears to have already found its mark — cord-cutters and consumers who have never taken a pay TV service.

A big part of the appeal ties into the speed Starry delivers (200 Megabits per second, upstream and downstream) and its unlimited data usage.

“Most of these [subscribers] are cord-cutters and cord-nevers,” Starry CEO Chet Kanojia explained, noting that his company’s approach provides a solid conduit for video services that are delivered over-the-top.

Starry is hitting on that appeal with a proposition that consumers get the 200 Mbps service for $50 per month along with free equipment, including a fancy-looking in-home WiFi hub with a touch screen and built-in Internet of Things capabilities.

“That [proposition] doesn’t really exist from a competitive provider,” said Kanojia, the former CEO and founder of Aereo, the now-defunct startup that targeted cord-cutters by capturing over-the-air TV signals with arrays of tiny antennas, delivering them to consumers via smartphones, tablets, PCs and other connected devices.

After attempting to disrupt the pay TV industry with Aereo, Starry is now trying to do the same for broadband service.

Starry launched last year in Boston, where it grapples with incumbent providers including Comcast, RCN and Verizon Communications. The service, which now passes more than 240,000 homes, recently debuted in beta form in Los Angeles and Washington, D.C.

Starry has plans to launch in more than a dozen additional markets this year. The launch list includes New York, Cleveland, Chicago, Houston, Dallas, Denver, Seattle, Detroit, Atlanta, Indianapolis, San Francisco, Philadelphia, Miami and Minneapolis.

Early usage trends do indicate that Starry subscribers are streaming a lot of video. The company said its median consumption is about 450 Gigabytes per month, and that the top 20% of its base consumes between 600 GB to 1.6 Terabytes of data per month. The number of consumers that hit that 1 TB threshold each month has been rising, the company said.

“Our business model is not predicated on imposing data caps,” Kanojia said.

Starry is “exceeding expectations from a penetration perspective … and not by a little, but a lot,” Kanojia said.

Early on, Starry is emphasizing service to apartment buildings and other types of multiple dwelling units, but will also focus more on individual homes as it continues to reduce costs from the electronics that fuel its platform.

In the MDU environments, Starry estimates that it’s seeing penetrations in the neighborhood of 20% to 25%, and up to 60% in some cases. Starry is marketing its service primarily via targeted, digitally delivered offers.

Starry might also seek opportunities with small businesses, but residential service remains the priority.

“We’re certainly capable of serving small businesses; we just don’t have the manpower to staff up for it,” Kanojia said. “Technically, there’s no reason why we couldn’t be a small/medium business service as well.”

Starry has not announced plans to broaden its pricing and packaging, though it says its service, which uses licensed spectrum in 37 GHz to 38.6 GHz band (backhauled with fiber), is capable of supporting speeds of 1 Gbps or more. When Starry terminates service to an MDU, it’s bringing in 2.5 Gbps today, Kanojia said.

Starry’s architecture includes the Starry Beam (a network node) that delivers connectivity to an on-premises transceiver called the Starry Point that works in conjunction with the in-home Starry Station. Starry also touted that its service includes 24/7 customer care.

Kanojia estimates that the site prep time for launches is about six weeks, and that Starry has prep work underway in about 17 cities.

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