Google Fiber seems poised to “satisfy business concerns,”...
Google Fiber seems poised to “satisfy business concerns,” said a research paper from Evercore Partners Friday. “Done selectively, Google Fiber has the potential to deliver a modest standalone return in addition to providing positive benefits to Google’s broader business in…
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promoting faster industry speeds and accessibility, migrating more TV viewing and online behavior into Google’s cloud, and paving the way for YouTube, Google Play and other Google experiences to become a bigger part of the TV home viewing experience, even outside of fiber-deployed areas.” Google plans networks in a limited number of communities, namely in the Kansas City area, Austin, and Provo, Utah. The analysts point to Google’s disruptive potential on established industries as well as its focus on faster connection speeds as a vital factor in its business. Cable operators will roll out faster speeds and next-generation video as a result, they said. Google will earn back a return on its investment in under a decade, Evercore predicted: “We estimate a 12 percent ROIC (or 8.5 year payback) per subscriber, which factors capex deployment, including cost to pass, connect, and provide hardware.” Evercore also analyzed Google’s interest in spectrum policy and the effects of its Wi-Fi offerings: “As Google gives this away for free, we suspect that it will bring down the cost and increase the availability of Wi-Fi. We already seem to be witnessing this through a roaming consortium agreement announced last year by Comcast, TWC, Cablevision (Optimum), Bright House, and Cox.” The report envisioned Google passing 8 million homes and acquiring roughly 3 million subscribers over the next seven to nine years.