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Google Fiber Forecast

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Google Fiber Deployment Cumulative Estimates as of Aug 2018

Community Status

Customers Passed

Customers Connected

Capex Spent

Gross Revenue

Google Fiber Cities

  • current
    • Atlanta, GA Start date: July 12, 2016
    • Austin, TX Start date: Nov. 9, 2013
    • Charlotte, NC Start date: July 1, 2016
    • Kansas City, KS Start date: March 1, 2013
    • Kansas City, MO Start date: March 1, 2013
    • Nashville, TN Start date: Aug. 1, 2016
    • Provo, UT Start date: Aug. 1, 2015
    • Raleigh-Durham, NC Start date: Jan. 1, 2016
    • Salt Lake City, UT Start date: Jan. 1, 2016
  • upcoming
    • Huntsville, AL Start Jan. 1, 2017
    • San Antonio, TX Start Oct. 17, 2016
    • San Francisco, CA Start Jan. 1, 2017
  • potential
    • Chicago, IL Start Jan. 1, 2018
    • Dallas, TX Start Jan. 1, 2018
    • Irvine, TX Start Jan. 1, 2018
    • Jacksonville, FL Start Jan. 1, 2018
    • Los Angeles, CA Start Jan. 1, 2018
    • Louisville, KY Start Jan. 1, 2018
    • Oklahoma City, OK Start Jan. 1, 2018
    • Phoenix, AZ Start Jan. 1, 2018
    • Portland, OR Start Jan. 1, 2018
    • San Diego, CA Start Jan. 1, 2018
    • San Jose, CA Start Jan. 1, 2018
    • Tampa, FL Start Jan. 1, 2018

# Days Between City Start Date and Today (today = 0)

Google Fiber Capital Expenses and Revenue Estimates

# Customers passed and connected

(per city per month)

Customers passed

  • Residential: 5000
  • Business: 500

Customers connected

  • Residential: 1300
  • Business: 250

Notes

  • Very broad categorization of unit not accounting for multi-dwelling units or multi-unit business.
  • Also each city allocated same # units passed and connected per month.
  • Penetration is fixed for both residential and business in all cities.

Capital expenses

(per unit passed / connected)

Infrastructure capex: $1400 (to pass customers)

Connection capex (drop to customer and connect)

Broadband only

  • CPE labor: $30
  • CPE matl: $50
  • Drop labor: $83
  • Drop matl: $11
  • Mktg/Ad labor: $0
  • Mktg/Ad matl: $48
  • ONT labor: $60
  • ONT matl: $182
  • Total: $464

Broadband & TV

  • CPE labor: $60
  • CPE matl: $350
  • Drop labor: $83
  • Drop matl: $11
  • Mktg/Ad labor: $0
  • Mktg/Ad matl: $48
  • ONT labor: $60
  • ONT matl: $182
  • Total: $794

Gross revenue

(per unit connected per month)

Residential

  • Broadband Only: $70
  • Broadband & TV: $130

Business

  • Business: $130

Notes

  • Revenue does not consider add-ons or custom business plans.
  • Residential connect fee of $300 not included in revenue
  • Assumed 75% residential plans broadband only for revenue and connection capex calculation.

Google Fiber Cumulative Customers Passed and Connected Forecast Estimates

Passed and connected customer count include a city's contributions only after their respective target start dates.


Google Fiber Cumulative Capex and Revenue Forecast Estimates

Capex and revenue include a city's contributions only after their respective target start dates.



Revenue Table


Capex Table

References

Apr 8, 2013

http://bgr.com/2013/04/08/google-fiber-cost-nationwide-423644/

Carlos Kirjner and Ram Parameswaran of Bernstein Research estimate that it cost Google $94 million — $42 million in Kansas and $52 million in Missouri

The analysts estimate that if Google were to build out a fiber network over the next five years to cover another 20 million homes, it could cost the company an upwards of $11 billion even before connecting a single house. Earlier estimates from Goldman Sachs suggested that a fiber network covering 50 million houses would cost around $70 billion to deploy.

June 16, 2013

http://www.cheatsheet.com/stocks/what-does-the-future-hold-for-google-fiber.html/

Google Fiber could reach 8 million homes by 2022, costing an estimated $7 billion for the build-out.

Armstrong predicted that Google could reach 830,000 homes at the cost of $1.25 billion a year. The nine-year-figure given Armstrong’s prediction would result in 7.5 million homes in nine years at a cost of $10 billion.

10/07/2015

http://www.multichannel.com/news/distribution/study-market-too-dismissive-google-fiber-s-potential/394356

http://www.ooyala.com/videomind/blog/google-fiber-poses-considerable-threat-incumbents

Google’s deployment so far “has been slow and limited,” estimating that Google Fiber currently passes about 427,000 homes, and 96,000 business locations, primarily in Kansas City and Provo, Utah.

Even if Google were to build out in all cities it has committed to or considering, it would still only pass 4.3 million homes – “still a small portion of the total market," he wrote.

The report also estimates that Google fiber has between 100,000 to 120,000 paid subs, “a very small number that likely plays into the incumbents' default belief that deploying and operating wireline networks at scale is much harder than commonly thought.”

Based on a past door-to-door survey in Google “Fiberhoods” in Kansas City, Bernstein estimates Google Fiber has achieved a penetration rate of about 20% of homes passed within one year of turning on service, “putting it well on the way to exceed 40% of homes passed and realize attractive ROIs.”

Kirjner also speculated a scenario in which Google Fiber could deploy to 15 million to 20 million homes within six to eight years, which would represent a “non-trivial commitment

January 14, 2016

Former Atlantan Shawn Gorrell, a principal technology architect who lives in Kansas City (Google Fiber’s debut market), has been eagerly tracking progress since the service was announced, in hopes of soon streaming ultra-high-def 4K television. “It’s taken about four to six months after the first digging in the neighborhood before installs start,” says Gorrell.

Google has established its Fiber Academy—a national training center for Fiber installers, with mock houses, workshops, and classrooms—in a large College Park facility near the airport. The company expects to train thousands of contractors there yearly to facilitate Fiber’s nationwide expansion.

Can't wait for Google Fiber to hit my house in Sandy Springs. It will likely take 2-3 years before you can actually get connected.

February 28, 2016 at 2:44 PM

While Portland has been on the sidelines, Google Fiber has committed to serve eight other U.S. cities. For customers in Oregon awaiting Google, the 24-month delay has been exasperating and bewildering.

MAR 3, 2016, 11:49A

Google Fiber Has Only 54,000 TV Subscribers, and Sign-Ups Are Slowing

Google Fiber has just 53,000 pay-TV subscribers, according to a new report by MoffettNathanson analyst Craig Moffett. The report estimates that Google Fiber had just 12,189 video subscribers in Kansas City, KS; 37,338 in Kansas City, MO; 2,718 in Provo, UT; and only 941 in Austin, TX – numbers that belie the degree of fanfare Google Fiber generates.

New data cobbled together by MoffettNathanson shows tepid growth among Fiber’s video subscribers in its initial metro areas during 2015. Fiber had 53,390 pay TV subscribers at the year’s end. That’s up from just under 30,000 in 2014. In Kansas City, Kan., Fiber covers 22.6 percent of the cable market, up from around 13 percent last year.

But the growth has slowed considerably: It grew at 136 percent for the last six months of 2014, and just 78.8 percent for that period in 2015. In Provo, Utah, where Google bought the municipal network three years ago, Fiber added just 65 video subscribers in six months.

Based on KC's experience I'd estimate the first beta customers are likely within 12-18 months, and the service will be more broadly available in 2-3 years depending on the success of the initial tests. Rolling fiber isn't cheap or fast.

What happened here in KC is that the first users got it within a year and everyone else got in within 2-5 years. You should be getting it soon, but not too soon. It all depends on where you live in Salt Lake City and where Google decides to install.

May 2016

http://www.recode.net/2016/5/11/11613308/google-fiber-alphabet

It cost Google more than $1 billion to spread across the Kansas City region and will likely cost as much in each new Fiber city, according to sources.

But wireless could be far cheaper — a fifth of the cost of fiber, which is roughly $1,000 per home, according to industry insiders.

People familiar with Fiber say it has hit its initial customer targets in its first three markets — selling broadband to about 30 percent of the homes it has hooked up for service, the industry standard for feasibility. Fiber brought in roughly $100 million in revenue last year, according to sources.

Carlos Kirjner, managing director of Alliance Bernstein, has tracked Fiber more closely than anyone else on Wall Street. He’s a bull on the business and its plans for a broad, profitable national rollout, estimating that it could connect up to 25 million homes in the next five years

FEB 1, 2016, 4:47P

http://www.recode.net/2016/2/1/11587470/googles-other-bets-eat-up-less-cash-and-make-less-money-than-we

Peck put 2015 revenue from Fiber, the broadband business breaking ground in 18 cities, at about $156 million; Mahaney had $99 million.

Revenue from the companies-not-named-Google totaled $448 million for 2015, and $327 million for 2014. On the earnings call, Alphabet and Google CFO Ruth Porat said most of those came from three operations: Fiber, Nest and Verily, formerly known as Google Life Sciences.

Feb 13, 2015

https://www.quora.com/Is-Google-Fiber-making-a-profit-for-Google

The cost for a national backbone built at the scale Google needs (not just touching "the NFL cities" as most backbones do) would be off-the-charts expensive.

The cost for FTTH builds are broadly estimated to be about $200 "for each home passed" plus about $600 "for each home penetrated". Do note that's ridiculously more expensive in dense urban areas such as Manhattan and any similar situation.

Google Fiber has been charging a $300 "connect fee", which covers some but not all of that - the rest has to be factored against the lifetime value of the customer


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