Consolidated Communications is aware that Google Fiber (NASDAQ: GOOG) is a formidable broadband service provider, including the markets where it also offers 1 Gbps broadband, but the century-old telco says that what differentiates them from their new competitor is customer service.
Udell (Source: Consolidated)
Speaking during the Stephens Spring Investment Conference, Consolidated Communications' President and CEO Bob Udell, said that Google Fiber has upset the status quo in the broadband market.
"I can say the market disruption they have caused has had some benefits and is raising the bar for bandwidth mostly for consumers," Udell said. "In Kansas City they overlap with us on 2,500 homes and that's increased moderately."
Udell added that while reports of Google Fiber's 1 Gbps service is reliable, they take a low-touch customer service approach that makes it challenging for customers to make changes.
As a result, Consolidated is winning back a number of providers from the Internet search giant in the Kansas City market where it currently offers its 1 Gbps service.
"They are active for periods of time in the Kansas City market, but not consistently and it's a low-touch model," Udell said. "We're more consultative and service-oriented and I would say that when a customer gets the Google service installed and gets it to work it's reliable, but if the customer wants to make changes it's difficult and those are the customers we win back."
For its own part, Consolidated continues to roll out its 1 Gbps product in the markets where it has built FTTH facilities. One of its next targets will be to bring the service to California, a market where it recently completed a network trial of the product.
"We have a gig product rolled out in all of our markets except California, which will come later this year, and it's actually going into trial this month," Udell said.
But whether they are offering 1 Gbps or rolling out lower speed tiers such as 20 and 100 Mbps, the company is able to support consumers' growing appetite for over the top video services.
This comes at a time when it is struggling to raise traditional linear IPTV revenues as content costs continue to rise. In the first quarter, Consolidated reported that traditional video subscribers were 123,208, down year-over-year from 124,463 in the same period a year ago.
"What we have found is raising the speed of the Internet product has allowed us to shift the emphasis from broadcast video to a more over the top strategy because we all know what's happening with content costs," Udell. "Google Fiber is a formidable competitor, but we don't see them that different than another other competitor, but are lower touch on the customer side."
At the same time, the service provider is seeing an 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.
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