Sprint MVNO (NYSE: S) Ting has spent its short life being a purveyor of low-cost wireless services, but all of that changed this week when the service provider announced it would start offering 1 Gbps fiber-to-the-premises (FTTP) services to consumers with a focus on the Charlottesville, Va., market.
Its build in Charlottesville is not being entirely done from scratch. To get there, the service provider has reached a deal to acquire local business-focused ISP Blue Ridge InternetWorks (BRI).
Purchasing BRI allows Ting to jump start its FTTP build. BRI has built 25 miles of fiber in both Charlottesville and Nelson County that's used today to provide business-grade Internet speeds of 25 Mbps through 1 Gbps and cloud services to business customers.
Having this fiber network already in place creates two potential benefits for Ting as it brings FTTP services to consumers: reduced cost and a backbone to carry traffic from homes out to Internet hubs in Charlottesville and other points in Virginia.
Like other 1 Gbps providers, including Google Fiber (NASDAQ: GOOG), there are many details about the service that are still unknown. A Washington Post article revealed that Ting will offer 1 Gbps for $100 a month. They could also potentially bundle the wireline service with their existing wireless offerings, something that could appeal to existing customers.
However, Ting does not indicate what specific neighborhoods or areas of Charlottesville will get the service.
Meanwhile, it appears that Ting's ambitions aren't relegated just to Charlottesville.
Echoing the Fiberhood strategy taken by Google Fiber--which also has been followed by C-Spire and TDS Telecom's Fiberville--Ting is encouraging current wireless subscribers who want Ting Internet in their towns to let them know on the Ting Internet page.
Elliot Noss, CEO of Ting, told the Washington Post consumers should expect it to bring the service into other towns and cities by creating partnerships with local officials.
"We've settled on this as the right first deal," Noss told the Washington Post. "Some of the other stuff we're looking at in the nearer term is less in the way of acquisition and more in the way of public private partnership."
Similar to Google Fiber, Ting will likely look to local town and city officials to get access to existing rights of way (ROW) to lay fiber and a streamlined permitting process.
While it's very early in the game, the emergence of another competitive non-telco provider to offer 1 Gbps services illustrates how important it is to have more high speed broadband options for consumers.
A new U.S. Commerce Department report reveals that although 98 percent of consumers had a choice of at least two mobile operators and 88 percent had two or more wireline broadband providers that could deliver a 3 Mbps service, that speed became inadequate "when multiple household members consume video streaming services, music streaming, and online games."
Perhaps not surprisingly, the disparity in terms of broadband provider choices became even more strained when considering 100 Mbps to 1 Gbps speeds. Only 3 percent of the population had 1 Gbps or greater available, and none had two or more ISPs at that speed.
At the same time, Ting and other providers face two challenges in delivering and marketing 1 Gbps services: Most consumers won't use anywhere near a gigabit of bandwidth and there's a lack of awareness that such services exist.
According to a new Pivot Group report called "GigaWhat? U.S. Broadband Awareness, Needs and Perceptions Study," 87 percent of 800 survey respondents said they had not heard of Gigabit before. What this means is that Ting and other 1 Gbps hopefuls will need to get out and aggressively educate consumers on the value of FTTP and higher speed services.
Even regional telcos like Cincinnati Bell have admitted that it does not expect a mass exodus of subscribers to sign up for its 1 Gbps service, but rather its move was more about driving brand awareness that it is no longer just another sleepy legacy voice-centric telephone company.
Regardless of the challenges Ting and other new entrants face in the 1 Gbps FTTP race, they are helping to create disruption in a broadband market that's been too long dominated by a cable and telco duopoly that's been slow and typically resistant to change.--Sean