Consolidated Communications is moving ahead with its 1 Gbps fiber-to-the-home (FTTH) expansion effort, announcing that it launched the service for residents across its existing fiber network in the Houston area market.
As the second in a series of gigabit launches for the telco, Consolidated launched its first 1 Gbps service in the Kansas City market where it competes against Google Fiber (NASDAQ: GOOG) in late 2014.
Following Google Fiber's pricing playbook, eligible customers in Conroe, Katy, and Lufkin Texas will be able to purchase the 1 Gbps service for $69.95 per month. Unlike Google Fiber, Consolidated does not charge consumers construction or installation fees when they sign up for the 1 Gbps service.
In Conroe, which is located in Montgomery County of Texas, there has been an uptick in economic development driven by oil and gas companies. Similarly, Katy is another bedroom community where there are a lot of middle and high income residential developments. Meanwhile, Lufkin is a rural town that's 2 hours north of Houston where it has been enabling FTTH over existing fiber.
"Predominantly it's Katy, Conroe and a little bit of Lufkin, and we'll see that expand into other markets as the year goes on," said Rob Koester, vice president of consumer product marketing for CCI, in an interview with FierceTelecom.
By leveraging the existing fiber it installed number of new housing developments built between 2007-2010, Consolidated has been able to light new FTTH services in these three communities.
It has taken the same approach in other communities it operates in other states, including Kansas City, Illinois and soon eventually in California, a market where it will officially launch a 1 Gbps service later this year.
"We made the transition in the Greenfield space from copper to fiber and even HFC in Kansas all about the same time," Koester said. "Every geography is a little bit different depending on how quickly the growth engines were running, but in Texas that growth engine was running well for a number of years."
Texas is just one of several markets where Consolidated is making the 1 Gbps service available to customers where it has built out FTTH facilities.
The next stop for Consolidated's 1 Gbps service train will be California, a market where it recently completed a network trial of the product.
While Consolidated has not broken out how many customers subscribe to its 1 Gbps service, Consolidated's CEO Bob Udell told investors during the first quarter earnings call that penetration rate of the 1 Gbps service is around 5 percent.
Similar to CenturyLink (NYSE: CTL) and TDS Telecom, Consolidated has seen that as it rolls out 1 Gbps it continues to see uptick in a number of its lower speed service tiers, including 20 Mbps. During the first quarter, Consolidated reported that a growing number of Consolidated customers are subscribing to a 20 Mbps service or higher.
"We don't get a lot of demand for the 1 Gig service, and what we seen is that it makes the phone ring quite a bit," Koester said. "We won't see them jump to the 1 Gig even though it's a pretty attractive price point, but they will look at a 50 or 100 Mbps service, and we fully expect to see in our Texas markets as well."
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This article was updated on June 8 with additional information from Consolidated Communications on June 8.