Boston-based wireless Internet service Starry plans to emerge from bankruptcy this summer with new ownership and a change in leadership, but subscribers may not even notice.
Under a reorganization plan approved last month by US bankruptcy judge Karen Owens in Delaware, existing shareholders will be wiped out and Starrys lenders will own the company. For customers, however, Starry does not plan to reduce the service or increase its current $50-per-month subscription rate, the company said Tuesday.
Co-founder and former COO Alex Moulle-Berteaux replaced CEO and co-founder Chet Kanojia. Kanojia, a serial entrepreneur who has been running Starry since 2015, remains a member of the board.
Starry will focus on selling services in its five existing markets Boston, New York City, Los Angeles, Denver and Washington, DC and not expanding to other cities for the foreseeable future, Moulle-Berteaux said in an interview.
We’ll likely see each other over the next 12 to 18 months primarily focused on the five cities they were in today, he said. We have focused on stabilizing the business and maintaining our subscriber base. We are only now starting to focus on regrowth.
Moulle-Berteaux worked at Kanojia’s previous company, the online television service Aereo. Previously, he was head of marketing at video game studio Rockstar Games and led marketing campaigns for Apple’s iPod and iPhone at advertising agency TBWA.
Starry has suffered two drastic layoffs in the past year. He has made some modest re-hirings since then, with little and slow headcount growth planned for this year, the incoming CEO said.
Starrys’ wireless equipment can reach nearly 4 million potential home customers in its current five markets, offering the potential for growth without the expense of adding more cities, he said.
According to the latest report, as of September, Starry had more than 91,000 customers. He has slightly less now after exiting the Columbus, Ohio market in January, Moulle-Berteaux said. It also services 87,000 units of public housing in Boston, Cambridge and other cities as part of government-funded efforts to bridge the digital divide.
Starry filed for bankruptcy after going public by merging with a special purpose acquisition company, or SPAC, in 2022. Its stock price plummeted and it failed to raise the capital needed to finance the planned expansion. The company filed for bankruptcy in February, less than a year after completing the SPAC deal.
Starry also faced new competition in the wireless Internet market from telecom giants T-Mobile and Verizon, which in recent years have begun offering home services for the same $50 starting price over their 5G networks (and at even lower for their mobile customers). T-Mobile had 3.2 million wireless home Internet customers at the end of the first quarter of this year, and Verizon had 1.1 million.
As a provider of urban connectivity, Starry faced increased competition, said Bryan Darr, vice president of government affairs at broadband market tracker Ookla. However, despite the failure, Starry has delivered solid broadband speeds to their subscribers so far in 2023.
And competing services are more focused on rural and suburban areas, not the core urban areas Starry is aiming for, Moulle-Berteaux said. We don’t see them marketing heavily and we don’t see them being successful in those areas, she said.
Even during the bankruptcy, Starry continued to roll out new features, such as a faster level of service. Clients are dying to hear the news that they were out of bankruptcy, Moulle-Berteaux said. All they want to hear from us is that we’re not leaving.
Aaron Pressman can be reached at firstname.lastname@example.org. Follow him on Twitter @ampressman.
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