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wrcousert

join:2010-01-07
Murrieta, CA

[Pricing] Why is FiOS so much more expensive than Google Fiber?

Google Fiber (if you can get it) costs $70 for one gig, up and down. Verizon charges $300 for half that. What's going on here?


Smith6612
Premium,MVM
join:2008-02-01
North Tonawanda, NY
kudos:24
Reviews:
·Verizon Online DSL
·Frontier Communi..

1 recommendation

Google's selling at a loss, most likely. Or, the deals they've struck with the towns make the barrier to entry so cheap it's just the initial infrastructure that holds the cost. Or, it's because Verizon wants more money, or has to put up with a lot more than what Google does. Who knows.


More Fiber
Premium,MVM
join:2005-09-26
West Chester, PA
kudos:32

1 recommendation

reply to wrcousert
There is no place that VZ and Google fiber directly compete.
Where there is no competition, each can price it as they wish.
--
There are 10 kinds of people in the world; those who understand binary and those who don't.


tito79

join:2010-03-14
Brewster, NY
kudos:1
Google doesn't need to compete there worth a lot of money so there not losing anything if they charge cheap for fiber services.

JPL
Premium
join:2007-04-04
Downingtown, PA
kudos:4
What do you mean that they're not losing anything if they go cheap for fiber? If they sell at a loss... they ARE losing something. For every subscriber. It could be that they're installing now for a deep discount (loss) just to create a market for their product. But if they want to be profitable with Google Fiber, eventually the price will close in on Verizon territory.

dewdude

join:2010-03-27
Manassas, VA
reply to wrcousert
Simple. Google doesn't want to be in the fiber business. I don't think they're profiting from it at all; just basically wholesaling the L3 access. Not to mention in some places; they're getting funding to build out the fiber network.

JPL
Premium
join:2007-04-04
Downingtown, PA
kudos:4
I keep reading that... and then I see them continually expand markets. They've announced plans for what 30 markets? Sure seems like they're pretty darn serious about it. Rolling out fiber isn't cheap. That would be a very expensive lark.

JPL
Premium
join:2007-04-04
Downingtown, PA
kudos:4
reply to wrcousert
BTW, my guess on all this - they're doing what Amazon is doing with the Kindle, only on a much bigger scale. Amazon takes a loss on every Kindle they sell (not a big loss, but a loss none-the-less), and they hope to make it up on you buying their content. Google knows how to make money on content.

sludgehound

join:2007-03-12
New York, NY
reply to wrcousert
Just a guess but usually a company argues 'First Mover' as reason. Meaning we pioneered the thing, now should rack it in.
Eventually market overwhelms them, as they expect. These things aren't a ring moat business. That's not unlike the high charges a Big Pharma can expect before generics kick in.


tito79

join:2010-03-14
Brewster, NY
kudos:1
reply to wrcousert
this is like pocket change for google im sure its cheaper for them to sub the network out while they still own it


dvd536
as Mr. Pink as they come
Premium
join:2001-04-27
Phoenix, AZ
kudos:4
reply to wrcousert
Shareholders

JPL
Premium
join:2007-04-04
Downingtown, PA
kudos:4
reply to tito79
Pocket change? Look, Google is a big company. But Verizon spent something like $23Billion to get FiOS deployed. Again, that's a hell of an expense - I don't care how deep their pockets are. Companies don't spend that sum of money on a whim. I believe Google is planning on sinking that money into this, and taking a bath on subscription rates because they're going to make it up in other ways. Since Google is good at targeted advertising, I would guess that that's what they're planning. But make no mistake - companies don't sink that kind of money into a venture unless they see it as integral to the future direction of their company.


tito79

join:2010-03-14
Brewster, NY
kudos:1
reply to wrcousert
Google is worth more than 32billion right now so what does that tell you?

AVonGauss
Premium
join:2007-11-01
Boynton Beach, FL
reply to JPL
said by JPL:

I keep reading that... and then I see them continually expand markets. They've announced plans for what 30 markets? Sure seems like they're pretty darn serious about it. Rolling out fiber isn't cheap. That would be a very expensive lark.

They didn't announce plans for 30 additional markets, they invited 34 additional areas (9 markets) to fill out their Google Fiber surveys of which out of those that do they (may) elect to deploy in those areas.

serge87

join:2009-11-29
reply to wrcousert
Because Google isn't recuperating $23 Billion in mass fiber deployment. When Google is out of the handful of states, er I mean cities you'll see their prices rise too.

eival

join:2008-07-09
reply to wrcousert
go take a look at what tv stations Google offers and you'll see what value is to be had

JPL
Premium
join:2007-04-04
Downingtown, PA
kudos:4
reply to tito79
I know they're worth more than that. So is Verizon. They could be worth a trillion dollars, and it would STILL be a very large investment. Just because they're worth x doesn't mean that they just toss a good percentage of that at some lark. Do that enough and you lose all your investors. Investors want ROI. They don't give money so a company can get its jollies. No investors... and no Google.

cghent

join:2014-08-22
Annandale, VA
reply to wrcousert
Google is doing what others have done in every other major communications technology roll-out. They are providing access at a lower cost and they are going for the long haul so they are building it mass access from the start. Think back to the old dial up days, it used to cost $50/month just to get dial up, and that was assuming you didn't have per minute fees, for slow access. Over time new providers started rolling out cheaper and cheaper solutions until you could get unlimited access for $15-$20/month. Access is the key, and if they have the biggest pipes to the most locations, they can roll out services that people want that current providers cannot support. They already know the content they want to support and that is where they are headed. The rest of these providers are sucking money out of all of us for little increase in new technology while they play at content speed wars with content providers. Why complain about Google potentially taking a loss at this point? What they are going to do is drive the costs for fiber down for all of us which is exactly how the market works.

EDIT: Think of it from Google's perspective - why pay another access provider to get to their content? Better for them to put their own pipes up and then they don't have to pay Verizon and others to access their content at higher speeds.

rody_44
Premium
join:2004-02-20
Quakertown, PA
Reviews:
·Comcast
reply to wrcousert
I think the thing to remember is google was given a lot of fiber that was already built in the initial stages of depolyment. Well it was at the expense of taxpayers. But when you go into a venture and inherit millions in infrastructure and also get a sweetheart deal on further deployment its going to go a long way on what can be done later and at what cost to future subscribers.