Boston-based wireless Internet service Starry plans to emerge from bankruptcy this summer with new ownership and a leadership change — 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 Starry’s lenders will own the company. For customers, however, Starry does not plan to cut back service or raise its current $50-per-month subscription rate, the company said on Tuesday.
Cofounder and former chief operating officer Alex Moulle-Berteaux has replaced chief executive and cofounder Chet Kanojia. Kanojia, a serial entrepreneur who has run Starry since 2015, remains as a member of the board of directors.
Starry will focus on selling service in its five existing markets — Boston, New York City, Los Angeles, Denver, and Washington, DC — and not on expanding to any more cities for the immediate future, Moulle-Berteaux said in an interview.
“You’ll probably see us over the next 12 to 18 months mostly focused on the five cities we’re in today,” he said. “We’ve been focused on stabilizing the business and maintaining our subscriber base. We’re just now starting to set our sights on re-growing.”
Moulle-Berteaux worked at Kanojia’s prior company, the online television service Aereo. Before that 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 went through two drastic rounds of layoffs over the past year. It has since done some modest rehiring, with “mild, slow growth” in staffing planned for this year, the incoming CEO said.
Starry’s wireless equipment can reach almost 4 million potential customer households in its five current markets, offering the potential for growth without the expense of adding more cities, he said.
At last report, in September, Starry had more than 91,000 customers. It has slightly less now after exiting the Columbus, Ohio, market in January, Moulle-Berteaux said. The also provides service to 87,000 units of public housing in Boston, Cambridge, and other cities under government-subsidized efforts to close the digital divide.
Starry ended up bankrupt after going public by merging with a special purpose acquisition company, or SPAC, in 2022. Its stock price plummeted and it could not raise the capital needed to fund the planned expansion. The company declared 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 began offering home service at the same $50 starting price via their 5G networks in recent years (and at even lower prices to their mobile phone 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 has been facing increased competition,” said Bryan Darr, vice president of government affairs at broadband market tracker Ookla. Still, despite the bankruptcy, Starry has been “delivering 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 where Starry is aiming, Moulle-Berteaux said. “We don’t see them marketing heavily and we don’t see them succeeding in those areas,” he said.
Even while in bankruptcy, Starry has continued rolling out new features, such as a faster-speed tier of service. Customers “are dying to hear the news that we’re out of bankruptcy,” Moulle-Berteaux said. “All they want to hear from us is that we’re not going away.”
Aaron Pressman can be reached at aaron.pressman@globe.com. Follow him @ampressman.