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Bernstein: Google Fiber Adoption Numbers Look Good
Should See Significantly Better Luck Than Historical Overbuilders

Google has been fairly tight lipped when it comes to hard take up numbers for their Google Fiber services, but a report this week by Bernstein Research indicates that around a third of the homes that can currently get Google Fiber are doing so. According to the survey, around ten to fifteen percent of those in Google Fiber's footprint take the "free" service, which delivers 5 Mbps speeds for no monthly charge after users pay a $300 installation fee. Everyone else goes for the speedier symmetrical 1 Gbps offering for $70, which waives the installation fee.

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The report's sample size was puny at 200 homes, though Bernstein came away impressed with Google's numbers all the same, and argues that Google has a much better shot at being profitable and successful than overbuilders in this sector have been historically.

“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 over-builders have achieved historically in their most successful markets," Bernstein analysts stated in the report.

Google Fiber competitors like Time Warner Cable have tried their damndest to brush Google Fiber aside as just another over builder. Historically, such companies (like RCN) have spent the last decade promising a lot of disruption, but delivering little.

"What they’re doing is not any different than an overbuilder," Time Warner Cable CEO Glenn Britt said on a conference call with analysts and the media in April. "And we’ve had overbuilders for the last several decades in the business."

Not like Google Fiber, they haven't.

According to Bernstein's survey, 77 percent of those surveyed were considering a switch to Google Fiber and 60 percent were highly likely to do so. Google's resources and overall sexiness leads Bernstein to believe that Google will do much better than the 20-30% penetration rate traditionally seen by overbuilders. That still doesn't mean that Google Fiber will reach more than a handful of markets, but they clearly can still disrupt the market in very positive ways.
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Albert71292
join:2004-10-31
West Monroe, LA

1 recommendation

Albert71292

Member

If it came to my area...

If Google Fiber came to the podunk area I live in, I'd snatch it up in a heartbeat! It's only a few dollars more than the $62.42/month 6Mbps DSL that I currently have!

battleop
join:2005-09-28
00000

battleop

Member

Are they turning customers up yet?

Are they in full swing turning up customers yet or are they still doing practice runs at this? I'm not sure I've seen any place that's said they are running full speed a head yet.
xenophon
join:2007-09-17

xenophon

Member

Re: Are they turning customers up yet?

They have been activating customers on the KS side for several months, but no word how many. The MO side is now getting physically hooked up but not sure if anyone actually activated yet, should be soon if not already.

This tracks hoods 'in progress'...
»fiber.google.com/cities/ ··· er=check
»fiber.google.com/cities/ ··· er=check

josephf
join:2009-04-26

josephf

Member

FREE Service - Who Would Say "No"?

Google offers FREE service. Who could refuse?

Time Warner and their ilk never before had a competitor offering free service.
elray
join:2000-12-16
Santa Monica, CA

elray

Member

Re: FREE Service - Who Would Say "No"?

FreeDSL offered ... FreeDSL. It lasted about two years.

FreedomPop and NetZero offer "free" wireless broadband.

Whether Google can legally offer their "free" $300 service is a matter not yet tested - and I suspect no MSO wants to be the first in line to go to court, rather, they'll slaughter Google on the Pay-TV side.
ISurfTooMuch
join:2007-04-23
Tuscaloosa, AL

ISurfTooMuch

Member

Re: FREE Service - Who Would Say "No"?

I'm not so sure Google cares about pay TV. I think they just put it there to lure in people whose primary motivation is TV. With as much bandwidth as they have, OTT video would be easy. All it's going to take is for someone to jump first. You can tell that the networks are utterly terrified of Aereo, but someone is going to do it, and then the floodgates will truly open.
xenophon
join:2007-09-17

xenophon

Member

Re: FREE Service - Who Would Say "No"?

said by ISurfTooMuch:

I'm not so sure Google cares about pay TV. I think they just put it there to lure in people whose primary motivation is TV. With as much bandwidth as they have, OTT video would be easy. All it's going to take is for someone to jump first. You can tell that the networks are utterly terrified of Aereo, but someone is going to do it, and then the floodgates will truly open.

^Likely. Google already said they don't plan to make anything on TV for now.
elray
join:2000-12-16
Santa Monica, CA

elray to ISurfTooMuch

Member

to ISurfTooMuch
said by ISurfTooMuch:

I'm not so sure Google cares about pay TV. I think they just put it there to lure in people whose primary motivation is TV. With as much bandwidth as they have, OTT video would be easy. All it's going to take is for someone to jump first. You can tell that the networks are utterly terrified of Aereo, but someone is going to do it, and then the floodgates will truly open.

OTT video is irrelevant and will remain so. The content industry isn't going to give anything away.

Aereo, in the end, will not disrupt anything, if they survive.

Google may not care about its pay-tv customers, but watch as TWC offers double-play for the same price as Google's single.

DataRiker
Premium Member
join:2002-05-19
00000

DataRiker

Premium Member

Re: FREE Service - Who Would Say "No"?

said by elray:

Google may not care about its pay-tv customers, but watch as TWC offers double-play for the same price as Google's single.

Time Warner already offers a triple play for 89.99 here in KC. As far as I can tell there is little interest.

People on a budget will sign up for the $300 dollar 7 year package and use magic jack and over the air.
ISurfTooMuch
join:2007-04-23
Tuscaloosa, AL

ISurfTooMuch to elray

Member

to elray
I think that Netflix might disagree with OTT video being irrelevant. And their play for original series is a smart one. Up to now, the studios have had them by the throat. All Netflix had were customers and a delivery platform, and a delivery platform can be copied and customers easily stolen away. But, with successful shows, suvs may want to stick around, which means they aren't as easy to steal, which means the studios don't have 100% control anymore. Still a lot of control, but a bit less than before.

And Amazon is definitely paying attention, as evidenced by the pilots they're running.

Sooner or later, something is going to give.
elray
join:2000-12-16
Santa Monica, CA

elray

Member

Re: FREE Service - Who Would Say "No"?

Netflix can disagree, and remain irrelevant.

fg8578
join:2009-04-26
San Antonio, TX

fg8578 to josephf

Member

to josephf
said by josephf:

Google offers FREE service. Who could refuse?

Time Warner and their ilk never before had a competitor offering free service.

It's "free" AFTER the $300 connection fee, which I understand can be amortized over a two year contract. Still, $12.50 a month for two years is not bad.
xenophon
join:2007-09-17

xenophon

Member

Re: FREE Service - Who Would Say "No"?

said by fg8578:

said by josephf:

Google offers FREE service. Who could refuse?

Time Warner and their ilk never before had a competitor offering free service.

It's "free" AFTER the $300 connection fee, which I understand can be amortized over a two year contract. Still, $12.50 a month for two years is not bad.

It's more of a home improvement fee, not a connection fee. If homeowner sells and another person moves in, they don't have to pay $300 again.

fg8578
join:2009-04-26
San Antonio, TX

fg8578

Member

Re: FREE Service - Who Would Say "No"?

said by xenophon:

It's more of a home improvement fee, not a connection fee. If homeowner sells and another person moves in, they don't have to pay $300 again.

Good point -- thanx

somms
join:2003-07-28
Centerville, UT

somms to xenophon

Member

to xenophon
said by xenophon:

said by fg8578:

said by josephf:

Google offers FREE service. Who could refuse?

Time Warner and their ilk never before had a competitor offering free service.

It's "free" AFTER the $300 connection fee, which I understand can be amortized over a two year contract. Still, $12.50 a month for two years is not bad.

It's more of a home improvement fee, not a connection fee. If homeowner sells and another person moves in, they don't have to pay $300 again.

»googlefiberblog.blogspot ··· pes.html

Free Internet service (5 Mbps speeds) to every home along the existing Provo network, for a $30 activation fee and no monthly charge for at least seven years.

FWIW: Only a one-time $30 charge for free GoogleFiber in Provo since that fiber network was already pre-existing!
xenophon
join:2007-09-17

xenophon

Member

Re: FREE Service - Who Would Say "No"?

Yup, Provo is the exception. What about homes not yet hooked up though?
TBBroadband
join:2012-10-26
Fremont, OH

TBBroadband to somms

Member

to somms
it is stupid period to charge them if they are already connected. Just a way to double dip and become any other company.

DataRiker
Premium Member
join:2002-05-19
00000

DataRiker

Premium Member

Re: FREE Service - Who Would Say "No"?

said by TBBroadband:

it is stupid period to charge them if they are already connected. Just a way to double dip and become any other company.

Giving free internet for 7 years is double dipping?????????????????
silbaco
Premium Member
join:2009-08-03
USA

1 recommendation

silbaco

Premium Member

Re: FREE Service - Who Would Say "No"?

It's not free. They are paying for it every single month regardless of if they even have Google Fiber.

DataRiker
Premium Member
join:2002-05-19
00000

DataRiker

Premium Member

Re: FREE Service - Who Would Say "No"?

said by silbaco:

It's not free. They are paying for it every single month regardless of if they even have Google Fiber.

30 dollars one time fee for 7 years
openbox9
Premium Member
join:2004-01-26
71144

openbox9

Premium Member

Re: FREE Service - Who Would Say "No"?

I assume he's talking about the debt the municipality is still carrying on its back.

DataRiker
Premium Member
join:2002-05-19
00000

DataRiker

Premium Member

Re: FREE Service - Who Would Say "No"?

That debt is there regardless of Google.

At least now that debt has essentially bought a 1 gig symmetrical carrier who will maintain the infrastructure for 7 years.

I still fail to see the double dipping.
openbox9
Premium Member
join:2004-01-26
71144

openbox9

Premium Member

Re: FREE Service - Who Would Say "No"?

Who said double dipping? Technically, the $39M in debt ($5.35/mth/household to cover the obligations) will produce a service that will offer 5 Mbps service (plus the one-time $30 fee). The 1 Gbps will still cost consumers an additional $70/mth (or more), on top of the $5.35/mth bond repayment charge. I believe that is what silbaco See Profile is suggesting.

I'm not suggesting that this deal doesn't benefit Provo and its previous mistakes. In fact, given its fumbling of this project over the last decade, Provo was very lucky to be able to exit this horror story as smoothly as it did. Given the sunk costs, residents are lucky to have Google come in for seven years and unscrew this FTTH project.
dra6o0n
join:2011-08-15
Mississauga, ON

dra6o0n

Member

Re: FREE Service - Who Would Say "No"?

Better than the minimalists paying 70~300 dollars a month with the debt on their backs, when they only need to pay once and work on budgeting their income for the debt.
TBBroadband
join:2012-10-26
Fremont, OH

TBBroadband to josephf

Member

to josephf
I would and know several people that would. Including businesses.

buzz_4_20
join:2003-09-20
Dover, NH

buzz_4_20

Member

$70 for Gigabit is selling well...

I'm Shocked. This would get gobbled up pretty fast anywhere it's deployed

wa2ibm
Premium Member
join:2000-10-10
San Jose, CA

wa2ibm

Premium Member

Price and market share is the key

Other overbuilders try to charge what the incumbents are charging, hoping for a payday. That just won't fly. They'll get some takers, but if customers don't see a significant difference, they'll stay where they are.

The numbers for Google fiber are better because they aren't trying for the max ROI per drop right away like the rest of the industry. They're charging enough to make a reasonable profit, but not drive potential customers away. All of this will lead to market share and drive prices of competitors down. That's what Google is trying to do.

We'll see what happens when Google has to start paying some of the exorbitant prices for content like the others have to.
dra6o0n
join:2011-08-15
Mississauga, ON

dra6o0n

Member

Re: Price and market share is the key

Someone makes a 5Mbps down/up for $10 a month in Canada with a activation fee and no installation fee, and watch how many Canadians are gonna take it, hook line and sinker.

Trying to sell a high speed internet at market standards would make consumers compare or even deny said products. Throwing out a product that's extremely cheap for a basic use on the other hand, will get them hyped up like crazy.

tshirt
Premium Member
join:2004-07-11
Snohomish, WA

tshirt

Premium Member

Only 30% take rate...

... for paid service? with a free install, premium gear and a relatively low price line isn't really that good a sign.
15% on the free for life. I wonder if they get the install fee back if they upgrade? and is upgrade pricing the same?
can higher tiers downgrade for free?
what's the foreclosure rate in KC?
bugabuga
join:2004-06-10
Austin, TX

bugabuga

Member

Re: Only 30% take rate...

Given their price plan structure, it's understandable. Especially if local ISPs lower their price on mid-tier plans (i.e. if non-techie customer has currently service and doesn't have issues, he/she might not want to switch to gigabit plan)
xenophon
join:2007-09-17

xenophon to tshirt

Member

to tshirt
The sample size was only 200 homes but even so, 1/3 is good considering someone is making a switch and a good chunk are not techie enough to make it worth it, especially since there are less channels.

For those moving into a new home not yet connected to any ISP, Google might get a bigger % over TWC, ATT, etc. Keep in mind some hoods in KC have 3-4 options for ISPs. A 1/3 take is pretty good for something not yet proven out.

Another thing to consider is many apt/condo multi unit buildings cannot switch unless the owners agree to. I live in a large condo hirise and Google wants something like 70% commitment or that we pay for wiring our building.
axus
join:2001-06-18
Washington, DC

axus to tshirt

Member

to tshirt
30% is good, but I think it may go lower in the future. Google let neighborhoods cherry pick themselves, and went to the places with highest demand first. So, the future neighborhoods will have less demand than the current ones.

On the other hand, now that Google has proven themselves, more people may switch. What incentives has Time Warner been offering to compete? Maybe when those incentives run out, more people will go to Google.

•••
Kamus
join:2011-01-27
El Paso, TX

Kamus to tshirt

Member

to tshirt
said by tshirt:

... for paid service?

Wow, it only took you one paragraph to spin this news bit 180 degrees.

mr sean
Professional Infidel

join:2001-04-03
N. Absentia

mr sean

Re: Only 30% take rate...

The truly competent professional shills do it in one sentence.

David
Premium Member
join:2002-05-30
Granite City, IL

David

Premium Member

Still no reviews here should be a sign

For as much "tout" as it has you would have thought someone would have made a review here. even smaller mom and pop providers make it here good and bad.

••••••
BiggA
Premium Member
join:2005-11-23
Central CT

BiggA

Premium Member

What happens when...

HFC overbuilders go to DOCSIS 3.1 and start offering gig symmetrical?

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