& cplSiteName &

Google Fiber Has a Shot as an Overbuilder

Alan Breznick
5/6/2013
50%
50%

Will Google Fiber succeed where other cable overbuilders have failed? It's possible. Google could sign up broadband and video customers in greater numbers for its fiber-to-the-premise (FTTP)-based network than such traditional overbuilders as RCN Corp. and Knology Inc. could ever achieve, Sanford C. Bernstein & Co. Inc. analyst Carlos Kirjner wrote in a research note published Monday. That conclusion is based on a door-to-door survey of 204 of Google Fiber's Kansas City "fiberhoods." The Wall Street research firm found both "extremely high awareness" of Google Fiber and "high purchase intent" for its services. So, Time Warner Cable and AT&T, the incumbent broadband and video providers in the Kansas City region had better beware. So should the incumbent providers in Austin and Provo, Utah, where Google plans to strike next. (See Provo Next to Get Google's Gig.) "Survey results suggest that Google will likely reach mid-to-high-teens penetration of homes passed very fast and may reach much higher penetration over time," Kirjner writes. While Google Fiber's ultimate penetration rate "will depend on the effectiveness of the competitive response, how customers value Google's faster access speeds and how Google's pay-TV offer and consumer responses to such offer evolve," Kirjner notes, Google Fiber could achieve penetration rates of 40 percent to 50 percent, well above what even Verizon Communications has achieved with its FTTP-based FiOS service. Specifically, the Bernstein survey found that a whopping 98 percent of Kansas City residents in the fiberhoods were aware of Google Fiber. Slightly more than half of the respondents, or 52 percent, said they would "definitely or probably buy" the service, while another 25 percent said they might purchase it. Only 19 percent said they would definitely or probably not buy Google Fiber. Of the 160 consumers who are considering Google Fiber, slightly more than three-quarters, or 60 percent of the survey sample, said they were extremely or very likely to buy it. Although these figures are not necessarily "predictive of the ultimate penetration of Google Fiber," Kirjner writes, "these very high purchase intent numbers do not allow us to rule out the possibility that Google will indeed achieve very high penetration of homes passed, well in excess of the typical 20 percent to 30 percent that overbuilders have achieved historically in their most successful markets." While Google Fiber's 1 Gbit/s symmetrical speeds are its biggest, most promoted feature, most Kansas City residents expressed interest in the dual-play bundle of broadband and pay TV. Some 70 percent of the households considering Google's offer, or 55 percent of the total sample, said they are most interested in the bundle. Unlike Time Warner Cable, AT&T and other incumbent providers, Google Fiber is not offering a phone service or triple-play package. But Bernstein does not see this as a major problem because of the regulatory burden and operational complexity of a telephony service and the growing trend by consumers to junk their wireline service for wireless. Bernstein notes that incumbents, particularly MSOs, have sometimes used a "scorched earth approach" of price wars and other aggressive tactics to overwhelm overbuilders. But the firm warns that this approach will likely not work with Google Fiber because of the parent company's deep pockets and careful expansion strategy. — Alan Breznick, Cable/Video Practice Leader, Light Reading

(2)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
earth
50%
50%
earth,
User Rank: Light Beer
5/7/2013 | 7:23:09 PM
re: Google Fiber Has a Shot as an Overbuilder
So far only a few hoods have been connected in KC, KS, which is one of the lowest income areas of KC metro. If they started in lower income E Austin, you may not get 50%. Also, KC has more ISP's than Austin. KC has TWC, ATT, Comcast, Charter, SureWest, CenturyLink and others. Not all in one hood but some hoods have up to 4 ISP options. Also, multiunit buildings need approval by apt owner or 70% of condo owners, which means some may not be able to get it (yet).

I imagine when this hits higher income/higher educated areas of KC metro, the uptake will be higher.
cangowrong
50%
50%
cangowrong,
User Rank: Light Beer
5/7/2013 | 4:06:00 AM
re: Google Fiber Has a Shot as an Overbuilder
Local provider/Overbuilder Grande Communications in Austin/San Antonio, was picking up 30% penetration, within 6 months or so, in the neighborhoods they serviced before their PR began trending down and their growth plans stopped with a service that was perceived as comparable to their competitors. With a service like Google is providing, in a market like Austin, that reacts to shiny new things, I would expect closer to a 50% take rate. The perception of the product is of a higher quality product, at least initially. You have to ask yourself, why would this not happen, and what can ATT, and/or TWC really do about it? I don't see a way out. They can spend a large amount to upgrade their networks to compete, but, in reality, can't charge more for the service they just spent all that money for. Best case scenario, is they spend the money, and build out fiber to the home to retain customers and plug the losses and get used to a MUCH lower profit margin on internet access.

ATT is expecting the same cherry-picking allowances that Google is getting(and that Grande did not get), allowing ATT to simply spend only in the neighborhoods that Google goes to, or build an entire area out that Google chooses. I can imagine it will be a bit of a nightmare for the homeowners as the easement installation happens by at least two providers at the same time.
Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
NEXT COURSE
Wednesday, September 14, 1:00PM EDT
What Is Agile?
Kent J. McDonald, Product Owner, Agile Alliance
UPCOMING COURSE SCHEDULE
Friday, September 16, 1:00PM EDT
How to Implement Agile
Alan Bateman, Director, Agile Transformation
Wednesday, September 21, 1:00PM EDT
What Is DevOps?
Colin Kincaid, CTO, Service Provider, Cisco
Friday, September 23, 1:00PM EDT
How to Implement DevOps
,
in association with:
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
Between the CEOs
CEO Chat: UXP Systems' Gemini Waghmare

8|26|16   |     |   (0) comments


Light Reading CEO Steve Saunders and UXP Systems CEO Gemini Waghmare discuss the strategic importance of digital identity for operators in the midst of transformation.
LRTV Custom TV
F5 Virtual Network Function Integrations With Partner Orchestration Platform

8|24|16   |   6:38   |   (0) comments


F5's Kishore Patnam, product manager for F5's service provider solutions, discusses why service providers are moving towards virtualization and how his clients are utilizing F5's solutions.
Between the CEOs
CEO Chat: Intel's Alexis Black Bjorlin

8|17|16   |   06:23   |   (0) comments


Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Telecom Innovators Video Showcase
Accelerating Telecom Digital Transformation With Nominum DNS

8|1|16   |   12:04   |   (0) comments


Light Reading's Steve Saunders gets an update from Nominum CEO Gary Messiana on how his company is helping carriers on the digital transformation journey.
LRTV Custom TV
Reinventing Operations for a Virtual, Software-Defined World

7|28|16   |   5:23   |   (0) comments


Heavy Reading Senior Analyst Jim Hodges speaks with Accenture's Larry Socher and Matt Anderson about what service providers must do to transform their business to get the benefits of SDN and NFV including: leveraging DevOps, introducing real-time OSS and implementing analytics.
Women in Comms Introduction Videos
Fujitsu Sales Leader Shares Lessons Learned

7|27|16   |   5:12   |   (1) comment


As Fujitsu's only female sales leader, Annie Bogue knows the importance of asking for what you want, being flexible (she's been relocated five times), keeping a meticulous calendar, 'leaning in,' working harder than everyone else around you, being aware and more.
Telecom Innovators Video Showcase
VeEX Test & Measurement Solutions

7|25|16   |   08:57   |   (0) comments


Cyrille Morelle, president and CEO of VeEX Inc., talks test and measurement with Light Reading's Steve Saunders at BCE 2016. This includes innovative products such as VeSion Cloud-Based platform for network monitoring; MTTplus Modular Test platform for Access, Business, Carrier Ethernet, Transport and Core services; and OPX-BOX+ for Fiber Optics.
LRTV Custom TV
VeEX: Live From BCE 2016

7|25|16   |   03:20   |   (0) comments


VeEX's Senior Director of Business Development, Perry Romano, explains how VeEX provides tools to help install, maintain, monitor and manage network infrastructure efficiently and effectively. The portfolio of products on display include the RXT-6000, MTTplus and TX300s.
LRTV Custom TV
Real-Time Telemetry & Analytics for Intelligent SDN Orchestration

7|25|16   |   03:09   |   (0) comments


Packet Design CEO Scott Sherwood discusses how real-time network telemetry and analytics are enabling a new breed of SDN orchestration applications.
From the Founder
The Russo Report: Driving Disruption

7|25|16   |   07:44   |   (2) comments


In the first episode of a four-part series, Light Reading Founder and CEO Steve Saunders and Calix President and CEO Carl Russo drive around town discussing the disruptive mega-changes in the communications industry and where hope lies for service providers to meet the escalating demands of the cloud.
LRTV Custom TV
NetScout: Maximizing Enterprise Cloud for Digital Transformation

7|20|16   |   04:53   |   (0) comments


Light Reading Editor Mitch Wagner talks to NetScout CMO Jim McNiel about maximizing the benefits of enterprise cloud and digital transformation while minimizing potential pitfalls with a proper monitoring and instrumentation strategy.
Women in Comms Introduction Videos
Ciena's VP Offers a Career Crash Course

7|20|16   |   4:14   |   (2) comments


How did Ciena's Vice President of Sales, Angela Finn, carve out her career path? Simple, she tells WiC. She stayed true to her company, customers and principles. She shares her advice for women on how to be authentic and credible, as well as for companies that want to make a real change to their culture and practices.
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 1, 2016, The Westin Times Square, New York, NY
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
Google Fiber Can't Be Called a Failure
Carol Wilson, Editor-at-large, 8/26/2016
FirstNet: A Billion-Dollar Boondoggle?
Dan Jones, Mobile Editor, 8/26/2016
WiCipedia: Should Men Be Included? & Olympians Face Discrimination
Eryn Leavens, Special Features & Copy Editor, 8/26/2016
How the Padres Hit an IoT Home Run
Mitch Wagner, West Coast Bureau Chief, Light Reading, 8/25/2016
Google Fiber Downsizing Not Confirmed
Mari Silbey, Senior Editor, Cable/Video, 8/25/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading CEO Steve Saunders and UXP Systems CEO Gemini Waghmare discuss the strategic importance of digital identity for operators in the midst of transformation.
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Animals with Phones
Live Digital Audio

Bridging the tech skills gap is a major challenge for service providers and suppliers alike today – and the challenge is two-fold when it comes to increasing the number of women in the comms space. Level 3 Communications has made it a priority to overcome both challenges by implementing several unique programs focused on building the right candidates from within – in addition to filling the funnel by supporting STEM and other education programs. During this radio show, you’ll learn about these programs from Mary Beth McGrath, SVP of Global Talent Management at Level 3, and the best ways to bridge your own skills gap so that you are motivated and equipped for change. Plus you’ll have the chance to ask Mary Beth your questions live on the air.