High investment, low output, Google has tasted the pain in the fiber business. Now it wants to replace the fiber with wireless technology to provide users with high-speed Internet access. However, facing the telecom and cable industry operators who have the advantages of network resources and user resources, Google's high-speed broadband projects are still promising. In 2010, Google announced the launch of its ultra-broadband program, which promises that the service's Internet access speed is 100 times faster than traditional networks and the network speed can reach 1 Gbps. Due to the slow progress of high-speed broadband launched by telecom operators at the time, Google Fiber's ultra-high-speed broadband service has stirred up waves in the United States.
Internet companies have entered the fiber-optic broadband access market, which is a new topic. Although some people questioned the feasibility of Google's involvement in this capital-intensive industry, Google, which is rich in money, still believes that this is likely to be a new cash cow.
However, a few years later, Google Fiber, which has been slow to make progress, has become unacceptable in its operations. In October of this year, Google Fiber CEO announced the departure of the company, the company suspended the promotion plan of multiple cities, followed by the reduction of staff size. This also means that the fiber project, which is highly anticipated by Google's parent company Alphabet, has been hit hard.
At the beginning, it was very "pull the wind" high-speed low price to attract users.
At the beginning of the release of Google's fiber-optic program, US netizens who often spoke slow Internet traffic saw hope. Google also received a $50 billion credit from the bank for the promotion of fiber-optic services.
The first to benefit is Kansas City, where Google Fiber first landed. Because of the ultra-high-speed broadband, Kansas City has attracted a large number of start-up technology companies to enter, and the nearby cities of Obaja and Des Moines want to join hands with Kansas City to create a cluster of emerging technology companies. The cost of using Google Glass for entrepreneurs here is $70 a month, and it would cost hundreds of dollars to choose broadband services from other carriers at the same time. In addition, users can also choose a package that includes a TV service for a monthly fee of $120. At the same time, Google is also taking care of the low-end market, users can choose "free" network access services, but need to pay a one-time initial construction fee of 300 US dollars, the network speed is 5Mbps.
In the early days, Google Fiber's package price was indeed very high, attracting a lot of users. But over time, Google found that its fiber-optic services suffered from profitability. Some analysts estimate that each time Google Fibers covers a single household, Alphabet will pay an additional one-time cost of $500. Under the pressure of high construction costs, Google urgently needs new pricing models to bring higher profits to itself.
Today, the era of paying for life for free is over. Open the official website of Google Fiber, the tariff is mainly: 100M tariff is 50 US dollars / month; 1000M tariff is 70 US dollars / month; 1000M plus TV service tariff is 130 US dollars / month. If users want to use a free network, they can only use a cell-sharing network, and such a network speed is much slower, and Comcast et al. provide similar services.
Moreover, as several competitors force Gigabit broadband, Google Fiber gradually lost its edge. For example, Comcost's 1Gbps broadband service, signed a three-year package to enjoy wireless traffic, the monthly price is $70. In terms of both speed and price, the advantages of Google Fiber are lost, and it has lost the favor of users. In 2010, Google said it would develop 5 million fiber users in five years. By the end of 2014, the total number of users was only 200,000, far less than expected.
Ouyang Yu, an expert in the field of mobile communications, has lived in New York for many years. In his view, Google Fiber is only a few commercials in a few non-key cities. In the northeastern United States, from Boston, New York, Philadelphia to Washington, DC, this core city band has not yet been covered by Google Fiber.
Failed to overcome the "last mile" problem
“Alphabet has indeed terminated fiber projects in some cities. Unlike the idea that domestic base operators have to do more than a lot of money to do Gigabit broadband, Alphabet is more concerned about profitability,†said a domestic communications industry close to Google Fiber. IT Times reporter. In October of this year, Google’s fiber optic CEO announced his departure. He admitted in his blog that he needs to change his previous product strategy in order to focus on new technologies and deployment methods. “The city that has started and is building (Google Fiber) will continue to work. Most 'potential cities' will be suspended." This means that Google Fiber will suspend the promotion of 10 cities, and Alphabet has terminated fiber projects in San Jose, Calif., and Portland, Oregon. According to Technica, Google Fiber will also pass 9% of employees through layoffs or job changes.
"Google does not have a basic network. The cost of promoting fiber-optic broadband is too high. Previously, Google relied on renting telecom operators to have optical cables to reduce costs. If the other party does not cooperate, Google Fiber can only dig pipes by itself, which requires more investment. And the construction period is very long." The above-mentioned person said that even operators with many years of experience will encounter the "last mile" problem when laying fiber optics, and must coordinate the relationship between residents and property to get into the community. . Earlier, it was reported that in Kansas City, residents complained that Google had destroyed grass and gas pipelines, and in some cities, telecom operators were also banned from erecting fiber from their own poles.
As a new face in the broadband market, more companies regard Google fiber as a competitor, and Google Fiber also lacks communication operation genes. When faced with the US first-line operators who have been operating telecom services for more than 100 years, the business is difficult to implement, not only lacking local resources. The partners also lack the support of the local government.
“It’s spending billions of dollars a year, and Google doesn’t want to spend that much money to just play a common role in the market,†said Jan Dawson, an analyst at research firm Jackdaw Research. Chetan Sharma, an independent analyst in the wireless industry, also admitted: "The long-term viability of Google's fiber project is a problem. I think Google CFO will end this experiment and there is no prospect."
Up to now, Alphabet has not disclosed the financial status of Google Fiber. The project has been merged into “Other Projects†in the financial report together with cutting-edge projects such as smart home Nest and driverless cars, which have high-volume but non-core businesses. . In 2014, “Other Projects†achieved revenues of $327 million and a loss of $1.9 billion; revenues in 2015 increased to $447 million, but losses almost doubled to more than $3.6 billion. In the second quarter of 2016, “other projects†revenue was $185 million, with a loss of $859 million. Alphabet Chief Financial Officer Ruth Porat told analysts that in the second quarter, Google spent $280 million on "other projects", mainly for continued investment in Google Fiber.
Looking to the wireless future is still unpredictable
For now, Google is realigning its high-speed broadband business deployment, for which Google acquired Webpass. Webpass is a small network operator, but it is now testing a new wireless cellular network technology called pCell, which can greatly improve the user's network access speed and is believed to fundamentally change the cellular network. Access method. Alphabet's acquisition of Webpass is based on the technology behind it because it overcomes the financial challenges of rebuilding fiber-optic networks.
"The cost of wireless technology is much lower than that of laying fiber. Google Fiber hopes to connect the antenna to the fiber through point-to-point wireless technology, such as transmitting antenna signals to street lights or directly to the apartment building." The IT Times reporter revealed that although this technology can also provide 1Gbps network speed, high-frequency signals may encounter problems such as building blockage and long-distance transmission, and the effect is still not as good as fiber optic cable.
Ouyang Wei believes that although users generally believe that fiber-optic networks are more stable, faster, safer and more difficult to interfere with external factors, wireless networks also have their own advantages, such as lower equipment costs and better flexibility. advantage.
It is reported that Alphabet has submitted an application to the FCC (Federal Communications Commission), and will test wireless signal transmitters in 24 cities in the United States in the next two years. This new technology "depends on the newly available spectrum" and can deploy fiber services more quickly. . Google Fiber has also disclosed that it is testing wireless technology in Kansas City and hopes to build a demonstration network next year.
Perhaps wireless technology provides a new solution for the development of Google fiber, but some analysts believe that in recent years, telecom operators have been constantly improving the speed of home broadband, they have the advantages of network foundation, user base, etc. Google's fiber-optic wireless technology trials have been successful and popularized, and people's expectations for it may have long since disappeared. In addition, the US government department hopes to use VoIP to urge telecom operators to improve the speed of users' Internet access. The support for Google fiber is likely to be reduced. The future of the lost Google fiber is still rampant.
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