Why network resiliency is critical amid the COVID-19 outbreak

Starry CEO Chet Kanojia joins The Final Round to discuss the importance of adequate broadband as the COVID-19 outbreak worsens throughout the United States, and the world.

Video Transcript

JEN ROGERS: With tens of millions of workers working from home these days, we've seen a big shift in what's happening with the internet in this country-- the times, the demand that's being placed on it. I want to bring in right now Starry CEO Chet Kanojia. And Starry is a next generation internet service provider. You provide the connectivity wirelessly through antennas. You have expertise in this area, though, overall.

And I kind of want to start with a big question, which is so far, we really haven't seen that much disruption, no major outages. Do you think we've just been lucky? Are you worried that we're going to have difficulty with the internet? Or are you confident that we have this under control?

CHET KANOJIA: I think for now, it appears that we have it all under control. But the trend is on higher and higher consumption. And in particular, as people work from home, your consumption on the uplink goes much, much higher than you're normally used to. So networks that are built for symmetry, or can control up and down speeds themselves, or capacity, are well-- but in really good position to be able to serve customers better than traditional coax networks-- cable networks-- which are biased downstream versus upstream.

So we think as the trend continues, as we're seeing-- we've seen our traffic triple during the daytime on uplink, mainly because people are doing video chats, or using collaboration tools, like Slack or things like that, where really the bandwidth consumption goes up pretty dramatically. But having said that, I think still we're nowhere close to-- even on coax networks-- I think we're still-- we've got a lot of headroom to be able to continue to drive utilizations.

I think the bigger challenge is as you have network outages, fiber cuts, other unplanned events, how do you deploy a workforce fast enough in difficult circumstances? I think that's where you will likely see challenges for networks, in particular wireline networks, whose maintenance is way more dramatic than a typical wireless network.

MYLES UDLAND: And then Chet, you know, I think a big conversation right now-- or a conversation that was being had before coronavirus-- is 5G and the deployment of a new kind of network. And I guess as you see the landscape right now, it seems like every business is just kind-- you know, scrambling to stay alive rather than worry about the next gen projects. When you look at 5G and the future network setups that-- that everyone was so hot on late 2019, does this kind of scutter some of those plans?

CHET KANOJIA: I think kind of the opposite. Because what we've proven-- and we're probably the only up-- we're kind of the only early-stage company in the sector, although for a start up, we have 700 people, so it's a little awkward to say-- call it startup still. But what we've proven is that we've gone in 18 months from zero to about 2 million homes passing coverage wise. And this year, we will hit about 8 and 1/2, 9 million homes covered.

So I think the promise of 5G and providing redundancy for these wireline networks is just getting highlighted. So I suspect, yes, clearly these are extraordinary times. And as the focus shifts towards building resiliency in society and in capabilities like work-from-home, telemedicine, whatever that happens to be, I think a huge emphasis is going to come towards how do we build that resiliency without having to spend hundreds of billions of dollars, which is what it's going to take to do with fiber, versus doing it with billions of dollars, which is what wireless technology [INAUDIBLE].

- Hey Chet, speaking of resiliency, I know you are a 10-year veteran serial entrepreneur. Prior to launching Starry, you were at Aereo and Navic Networks. When you think about the startup ecosystem right now, how do you anticipate that the winners and losers will be made, especially as you think about the funding pipeline here?

CHET KANOJIA: Great question. I don't think anybody knows how this is going to shake out, because I think a lot of-- it's going to come down to, I think, companies that are consumer companies that have robust product demand, they're going to do it differently. Then you have SaaS companies, or companies that don't have-- you know, people are going to shut down for six, eight weeks, 10, 12, 6 months in terms of purchase cycles.

And we, you know, ironic as it is, or perhaps not, we had our biggest quarter ever in terms of sales and deployment. So from our perspective, we looking at this and saying this is driving the point of what we are trying to do home. But, you know, early stage companies are very sensitive to cash on hand. They're very sensitive to next year on the financing.

And it's going to come down to, and I think that's a concern we have, too-- what's the status of capital markets as things begin to ease up? Will capital be available? We think for companies like ours, they should be, just because the product market fit and demand is there. But ultimately, it's going to be a function of whether the capital markets are willing to invest in early-stage companies.

Having said that, I think, you know, look, it's people are going to look at good companies. And they're going to invest in good companies. Who knows where valuations will be. That may change. In particular, more speculative things, where-- coworking or other things like that, where people who are banking on societal shifts to happen may not go that way.

But in certain other cases, where it's stable, and in our case, it's a utility. I think it's just getting proven out that broadband is right up there with electricity and running water for people to function. And I think that if this trend continues, which I think it will, where companies will realize that a good portion of the workforce can be equally effective working from home, it might have a ripple effect on real estate. It might have a ripple effect on lots of different things that we're looking at.

JEN ROGERS: Certainly an essential utility for all of us working at home so we could talk with you today. Chet Kanojia is the CEO of Starry. Thank you so much.