Google Fiber may have driven consumers and providers to think differently about broadband pricing and speed possibilities, but the company’s struggles are creating new opportunities for emerging competitors like Yomura Fiber.
Yomura may be a new name to me and others, but the company is hardly a nascent provider. According to its website, the service provider has been in business since 1993.
Like Google Fiber, Yomura is keen on offering a series of gigabit speed tiers over fiber with a 1 Gbps and 10 Gbps option. Pricing is also competitive: $99 a month for 1 Gbps and $999 for 10 Gbps. Neither offering requires an installation fee.
Following the shutdown of its Webpass broadband wireless operations in Boston—a move that left many customers with only local incumbent telco Verizon or cable operator Comcast—Yomura is quickly extending its network to these locations.
Yomura told FierceTelecom that its plan for Boston and other cities like Atlanta was simple: take off where Google Fiber left off.
Having received approval from Yomura’s company directors to begin a deployment in Boston, the provider said it “already have network there so we're doing a fast ramp up to address the customers that are losing service then we'll focus on a wider spread roll out as a second phase.”
The service provider’s presence in markets like Boston—one where the options are relatively limited—could be another hope to carry on Google Fiber’s mentality to get higher speed broadband speeds to more customers.
Revolving leadership, focus
For Google Fiber, the challenges have been well documented. Over the past two years, the division has seen a revolving leadership door as well as issues with getting access to city rights of way and damaged infrastructure of residents.
Being an insurgent player that did not have previous network build out experiences, Google Fiber likely realized that building out a Greenfield FTTH network is not for the faint of heart.
While procuring network equipment and fiber cabling has a cost associated with it, the bigger challenge is associated with the labor to make the builds. According to estimates by Clearfield, construction costs make up 70% of the build equation with the other 30% on equipment. Google Fiber may have not been disclosing how many subscribers it has, but it’s likely not enough to make up for the costs.
The provider made some progress in driving some communities to rethink rules regarding access to utility poles in Kentucky and Tennessee—two efforts that were met with vehement protest from local incumbents AT&T and Comcast.
But the other issue has been leadership. Being part of a larger company that has focus on other interests like selling cloud services and consumer devices, Google Fiber’s parent Alphabet may have started to get impatient with the challenges fiber build.
Cracks in the armor began to show in 2016 when Google Fiber president Craig Barratt suddenly left after parent Alphabet put the kibosh on his proposal to build fiber to more locations.
Even his replacement Gregory McCray did not last long, resigning a few months into the job. At that time, Alphabet did not give a reason for his departure.
It will be interesting to see how Google Fiber’s new CEO transitions the unit further. The company named TWC veteran Dinesh Jain to be the CEO of the company’s broadband-focused "Access" division, marking another rotation in its leadership revolving door.
Meantime, Yomura and other emerging competitors will be eagerly awaiting opportunities to get out broadband in areas Google Fiber cuts back or abandons.
New broadband dialogue
Even for all of Google Fiber’s follies, the company's presence in the broadband market paved two dynamics: ILECs to respond with faster speeds and new competitors to build with a clean sheet network.
Even though AT&T has denied this idea, it’s not hard to see that when Google Fiber entered a market like San Francisco, AT&T adjusted the pricing of its 1 Gbps service to match the $70 a month price point.
Other telcos such as TDS, Cincinnati Bell, CenturyLink and eventually Verizon also followed suit with similarly priced offerings.
While Google Fiber is not present in Cincinnati, it’s notable that Cincinnati Bell has expanded its fiber network to 70% of the city’s homes and businesses. Meanwhile, CenturyLink and even Hawaiian Telcom say having a 1 Gbps FTTH option has created a halo effect to drive customers to higher speeds of 50 and 100 Mbps.
Having created awareness about how higher speed broadband can enable for consumers, Google Fiber has been a success in perhaps indirectly encouraging competitors like Yomura to pick up the ball and drive the broadband dialogue forward.
Unlike Google Fiber, Yomura appears to have plenty of experience in building out large-scale networks. In 2016, the provider began a project to build a coast-to-coast network to enable us to provide high speed internet services.
Along with Boston, Yomura is currently planning broadband roll outs in parts of Denver and Charlotte. Like Google Fiber and C Spire, it has asked residents to sign up to ask for service in their areas.
Perhaps the one challenge that Yomura will face is brand recognition. But with more of Google Fiber’s existing cities that feel left behind by broken promises, the company could be a new alternative to advance a new broadband dialogue.--Sean | @FierceTelecom