Google Fiber Optic Network is Expensive: Up to $11 Billion a Year

The America investment company Bernstein Research said in a Research, if Google plans to build a nationwide fiber optic network for 20 million families in five years, their capital spending will reach $11 billion a year.


Last year, Google announced details of the Kansas city valley fiber project for the first time, there are analysts bluntly pointed out that when Google creating new broadband service it will face several obstacles. Bernstein Research analyst Carlos Kirjner and Ram Parameswaran estimates that Google fiber only in the first phase of the project in the Kansas city, Google will need to spend $84 million, cover 149000 families to provide this service.

Among them, about $38 million will be spent in Kansas city, Kansas, $46 million will flow to the Missouri, Kansas city, the two cities every family laid Google fiber optic network cost is $674 and $500 respectively.

In addition, Google also needs to be linked to the indoor fiber optic cable, which is a huge cost.

Bernstein Research estimates that if it connects only indoor fiber optic cable, Google’s cost at $464 per family, if it uses broadband and pay-TV services family at the same time, the connection costs would rise to $794 per family.

Bernstein Research, said: “in order to reduce labor costs, Google will connect each community family optical fiber network.

And parames varin also pointed out that if the Google in Kansas city fiber optic service scope expanded to 300000 households, the cost will be doubled, to $170 million. Meanwhile, Google in Austin, the fiber construction investment and Kansas city are flat or even smaller, because the initial analysis results show that the underground infrastructure area even if needed will be bigger, but because of Austin’s population density is bigger than a Kansas city, the average access cost will be less.”

Limited impact:

At present, such as comcast and time warner cable and Charter the existing service providers covered by indoor fiber optic cable users are 53 million, 30million and 12 million respectively. Bernstein Research on the basis of these services, calculated the Google fiber cover the total cost of 20 million families. According to the calculation, Google fiber optic service penetration rate of 15%, equivalent to a “large and medium-sized network access and Paid-TV provider.

And according to parames varin, estimates that if Google make optical fiber network coverage within five years, 20 million families, “the need of capital spending will reach $11 billion a year or so.” So, Google should carry out this project, which will suffer a big question. They said in the report: “this has limited impact on the global broadband access industry.” It is estimated that Verizon before the stop implement FiOS expansion projects, each family optical network access costs about $4000.