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How Google Plans To Turn A Profit On Kick Arse Gigabit Fibre -- Maybe

Sometimes with all of Google’s highfalutin talk about making the world’s information useful, it’s easy to forget that it’s a business. GigaOm reports that the Google fibre “experiment” in the US is no exception. It’s not infrastructural charity. It’s a money-maker. Or at least it could be.

On paper the economics of Google Fibre seem a little precarious. Google spent unknown billions installing the network only to deliver unheard-of Gigabit speeds for just $US70 a month. What’s more, it’s offering residents of Kansas City 5Mb/s fibre service for free. GigaOm spoke with top Google execs and other sources and explains the smart business moves that not only make the product better for consumers but also better business for Google.

  • Building its own gear: Rather than turn to an outside vendor for its network boxes, Google cut costs on gear by engineering them from the ground up. Building custom gear means it’s not paying for any extraneous features, and also allows Google to precisely tweak and update the hardware to the exact needs of its network design.
  • Getting people excited: Google worked with local government and other companies to get the mainlines of the network installed, but if customers want Google Fibre they’re going to have to fight for it. Google divided the city up into “fibrehoods” and wants to get five to 25 per cent of households in each to commit to Google Fibre before sending out technicians. The Fiberhoods with the most commitment to the service get it first.
  • User installation and service: You know what sucks about your ISP’s service? Everything. But the worst part is waiting two weeks for a technician to show up and install your gear, or, worse, waiting two weeks for them to show up and fix something that doesn’t work. Google’s network boxes are outfitted with QR codes that will eventually allow users to install and perform maintenance on their own. What’s more, as with the Nexus 7 tablet, Google might even eventually start selling the boxes and service on Google Play. Imagine never talking to a customer service rep again. Sounds good.

Of course, we have no idea how long it will take Google to recuperate its investment on Google Fibre, and many of these cost-cutting measures are still in the works. Still, it’s nice to hear that delivering what appears to be a superb product to consumers is something that might actually make a company money. Crappy ISPs beware. [GigaOm]

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