Alphabet GOOGL-owned Google recently announced the expansion of its high-speed Internet service through its fiber-optic network to its next city, San Francisco.
The search giant plans to use the existing fiber installations to provide the high speed Internet connection of Array gigabit per second, instead of building its own infrastructure. For now, the service will be available to those residential and business customers only who have fiber optic cables.
The news comes on the heels of Alphabet’s partnership with Huntsville Utilities to expand its fiber-optic network to Huntsville, AL. Here also, the company will not invest in building the fiber network. Instead, Huntsville Utilities will build and lease the infrastructure to Google Fiber.
Google Fiber
The high speed Internet service — Google Fiber — was launched in Kansas City, MO in Sep 20Array2. With the launch, the company intended to put pressure on major broadband providers like AT&T T, Comcast and Verizon Communications VZ to upgrade their networks to support higher Internet speeds.
Alphabet offers speeds of up to Array,000 Mbps (Array gigabit per second) for $70 a month — about Array00 times faster than the average broadband speed available in the country — and cable service for $Array30 per month in its cities.
The service is already available in Kansas City, KS and Missouri; Provo, UT; Austin, TX; and Atlanta, GA. The company also has plans to expand to other cities including San Antonio, TX; Nashville, TN; and Charlotte, NC.
Bottom Line
The aggressive expansion plans reflect intensifying competition in the broadband space. AT&T recently spread its super-fast Internet service to 38 more cities including certain parts of Los Angeles.
However, Alphabet can bank on its speed to attract users. Also, with Google Fiber’s expansion, which is comparatively faster than most existing Internet providers in the U.S., the company is pushing its peers to upgrade the Internet services or lower the prices. With the expansion of Google Fiber network, users will go online more frequently and be more likely to use its other services, thereby driving revenues.
Alphabet has a Zacks Rank #3 (Hold). A better-ranked stock is MeetMe, Inc. MEET sporting a Zacks Rank #Array (Strong Buy).
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