Google’s One Year Fiberversary: Market Impact Not Yet Quantifiable but Immeasurable

Published on July 30th, 2013.

On July 27, 2013, Google Fiber will celebrate its one-year Fiberversary (their words, not mine!) of its official services launch in the Kansas City market. So exactly what has Google Fiber accomplished in year number one?

This article is an excerpt from the original blog post, written by Teresa Mastrangelo, that can be found on the Advaoptical Blog

When I think of Google, words such as innovator and disruptor come to mind. Whether it is the self-driving car, Google Glass, or the future Google TV; there has been no lack of attempt to change how consumers live, work and play – and Google Fiber is no exception.

Yes, there are other operators that have been offering 1Gbps broadband services longer than Google; but Google Fiber has done more to plant 1Gbps into the consciousness of both consumers and competitors’ minds than any other operator in any market.

Prior to Google Fiber – most consumers simply had no concept of the difference between 1Mbps, 10Mbps, 100Mbps and 1000Mbps – except to know that one is incrementally faster than the other. Now 1Gbps is the target for most municipal broadband projects and is certainly on the roadmap for most operators.

So let’s take a look back on year one.

Changing the Business Model

One of the areas where Google took a non-traditional approach was in the build-out. The first step was to divide the city into “fiberhoods” of 250-1,500 households and set a customer participation goal (anywhere from 5 percent to 25 percent) based on the following:

  • 5 percent: areas will be easy to build and install.
  • 10 percent: areas that will be more complicated to build and install.
  • 25 percent goal: areas that will be the most complicated to build and install.

Second, to motivate consumers, Google Fiber prioritized construction build out as follows:

1. Service will only be built in fiberhoods that meet their pre-registration goal

2. Those with the greatest participation will be built first.

Did it work? In its first market, Kansas City (both Kansas and Missouri) – 180 out of 202 fiberhoods met their participation goal – meaning 1Gbps broadband would be available to 89 percent of the consumers in this market. Construction began in December 2012 and as of July 2013 – two fiberhoods were connected; 43 were in progress, while the bulk of fiberhoods are schedule to be built out in the fall of 2013. In the initial build (Kansas City) Google Fiber will pass 149,000 homes (57K in Kansas and 92K in Missouri).

Actual subscriber data has not been made public, but it is likely to be less than 2,000, given the current availability.

This “build to demand” model may in fact be the best model for FTTH deployment in an overbuild scenario.  This allows operators to prioritize their capital spending in markets where they will be able to achieve their best ROI and it will be these early markets, with high take rates, that will likely fund expansion of FTTH networks over time.

Continue reading on the AdvaOptical Blog »

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