Starry Group Holdings reported that the fixed wireless internet service provider added 8,017 customers in the first quarter of 2022, ending the quarter with 71,247 customer relationships, up 72% year over year.
The Starry Connect program now reaches more than 63,000 units of public and affordable housing, all of which are automatically eligible for participation in the federal government’s Affordable Connectivity Program, the company noted.
“Putting our company on a path to sustained growth requires consistent and disciplined execution, which our team routinely demonstrates,” said Starry co-founder and CEO Chet Kanojia in a statement. “We are attaining our customer growth targets while simultaneously building out our network and driving efficiencies in our business on both technology development and service operations.”
During the earnings conference call – the first ever for Starry since it went public in March – Kanojia, who’s an engineer by training, provided a brief background. He explained that the team at his last company, Aereo, which shut down, wanted to build a new company focused on broadband for a variety of reasons.
Disrupting the sector with extremely low-cost technologies and achieving scale with relatively less investment than traditional approaches was part of the game plan.
“We believe broadband is essential for everyone,” just like food and shelter, he said. But the experience is universally bad and the customer service experience is just poor. “I think we can all relate to that,” he said.
The technology didn’t exist to accomplish what it set out to do so Starry created the technology stack themselves. That took about four years. Now the tech stack is based on global industry standards and it’s been proven out, according to Kanojia. Starry uses licensed millimeter wave spectrum and 802.11-based technology.
Kanojia said a lot of attention has been focused on mobile providers offering fixed services and on new fiber deployments, but they tend to be focused on different geographic markets than Starry. His company is focused on the more urban and denser parts of its markets.
Asked about the marketing around fixed wireless coming from T-Mobile and Verizon specifically, he said it’s helping from a broad awareness perspective, but reiterated that he doesn’t see them necessarily going after the exact same households.
Starry currently operates in six markets: Boston, New York City, Los Angeles, Washington, D.C., Denver and Columbus, Ohio. It offers Starry Connect, a $15/month product that promises 30 Mbps and targets public and affordable housing. Its most popular plan is $50/month.
The company said it increased penetration by 39 bps year-over-year by focusing sales and marketing efforts primarily on multiple dwelling units (MDUs) where Starry equipment had previously been installed.
By the numbers
Revenue of $7.4 million reflected an increase of 63% year-over-year as net customer relationships grew 72%, offsetting a decline in average revenue per user ARPU.
Net loss increased to $53.6 million compared with a net loss of $41 million in the first quarter of 2021.
Adjusted EBITDA loss increased to $27.8 million as investments were made in network, systems and staff to support growth in current and future quarters. The Adjusted EBITDA margin improved by over 100 percentage points year-over-year.
As of March 31, Starry had cash and cash equivalents of $166.7 million, reflecting funds raised in its business combination. Starry’s outstanding debt at the end of March was $218.5 million.
For the full year 2022, Starry expects customer relationships to be greater than 100,000 at the end of full-year 2022, reflecting growth of at least 58% year-over-year. Revenue is expected to be more than $50 million, assuming it receives more than $15 million in federal regulatory revenue through the FCC’s Rural Digital Opportunity Fund in 2022.