Google Fiber has captured an eye-opening 75% of homes it passes in certain medium-to-high income Kansas City neighborhoods, according to an extensive new analysis from Bernstein Research. The firm employed a market research company to conduct a door-to-door survey in 5 KC neighborhoods in which Google Fiber has rolled out. This is the first research I'm aware of revealing how Google Fiber may be performing (Google itself has never shared any detailed data on Google Fiber).
In Wornall Homestead, the highest household median income neighborhood ($116K) Bernstein surveyed, it found that 83.1% of respondents were taking Google Fiber service - 15.3% for the $120/mo pay-TV+ broadband bundle, 52.5% for the $70/mo 1 Gbps broadband-only service, and 15.3% for the free 5 Mbps broadband service. This contrasted with Community College, the lowes household median income neighborhood ($24K) surveyed, in which 27.2% of respondents were taking Google Fiber service - 7% for the $120/mo pay-TV+ broadband bundle, 19.2% for the $70/mo 1 Gbps broadband-only service, and 7.3% for the free 5 Mbps broadband service.
In addition, Bernstein also found extremely high satisfaction rates among Google Fiber users, with all income levels rating the installation service a 9 or 10, all rating "would you recommend the service?" a 10, and all saying they would definitely stay with Google Fiber even if their prior broadband provider matched the speed and quality. By far the number one reason cited for switching to Google Fiber was desire for faster broadband (45.4%), followed by "I didn't like my previous TV/broadband provider (15.5%) and "I wanted free Internet at home" (13.9%).
Looking ahead, Bernstein also estimates that within 3-4 years, Google Fiber could have over 50% penetration of all Kansas City neighborhoods paying for some level of service, with another 10% taking the free broadband service, particularly as Google increases its marketing and also potentially reduces prices.
Bernstein notes that incumbent pay-TV and broadband providers in the area have made minor improvement in their services, but none have announced major network upgrades to compete with Google Fiber's 1 Gbps service. Bernstein also notes that, despite customers being motivated by faster broadband, it's hard to name many apps that actually require a 1 Gbps service today.
Perhaps most important, Bernstein concludes that Google Fiber could become a profitable business long-term for Google and be expanded to tens of millions of additional homes. This would be significant in at least two important respects: it would greatly enhance the variety and performance of video apps, and it would shake up the broadband service provider market. The Bernstein analysis will no doubt be reviewed closely by regulators assessing the Comcast-Time Warner Cable deal.
Categories: Broadband ISPs
Topics: Google Fiber