The talk in the Fiber Broadband community this past summer has been about Google Fiber. The launch from the internet giant has been expected with both excitement and some skepticism. How does Google plan to make fiber roll out a good investment?
Ever since first announced in 2010 there have been speculations about the set up and business case. Now that the product and prices have been revealed and Google has concluded that residents in 89% of Kansas City, Kan. and central Kansas City, Mo. fiberhoods will be able to get brand new, next-generation fiber connected to their home, I think it is safe to say that Google Fiber is no charity case. It is hard and well executed business.
Google has an appealing and simple offer allowing the customer to choose 1 Gig for $70 a month, with IPTV for $120, or pay $300 and get the fiber installed in your house – allowing you to have free 5 megabit internet for 7 years.
Free internet! What is the business case logic behind this? As opposed to more traditional broadband offerings, this offer is designed for loyalty and not for lock-down. And with the Google Fiber offer, I say, that Google is safe to expect long term paid penetration. The point being, that as you already are connected, then why not upgrade to the paid service when you feel the need for more bandwidth? And that need will come.
This, I presume, is the logic behind the free internet offer. The construction fee has to be payed only once and it might even be a valuable investment in your house. Google has no reason to force more speed than needed on to the customers. The need for speed grows automatically. The possibility that those customers will upgrade and be truly loyal is substantial.
Ever since first announced in 2010 there have been speculations about the set up and business case. Now that the product and prices have been revealed and Google has concluded that residents in 89% of Kansas City, Kan. and central Kansas City, Mo. fiberhoods will be able to get brand new, next-generation fiber connected to their home, I think it is safe to say that Google Fiber is no charity case. It is hard and well executed business.
Google has an appealing and simple offer allowing the customer to choose 1 Gig for $70 a month, with IPTV for $120, or pay $300 and get the fiber installed in your house – allowing you to have free 5 megabit internet for 7 years.
Free internet! What is the business case logic behind this? As opposed to more traditional broadband offerings, this offer is designed for loyalty and not for lock-down. And with the Google Fiber offer, I say, that Google is safe to expect long term paid penetration. The point being, that as you already are connected, then why not upgrade to the paid service when you feel the need for more bandwidth? And that need will come.
This, I presume, is the logic behind the free internet offer. The construction fee has to be payed only once and it might even be a valuable investment in your house. Google has no reason to force more speed than needed on to the customers. The need for speed grows automatically. The possibility that those customers will upgrade and be truly loyal is substantial.
