Google Fiber Now Has its Eyes on Los Angeles and Chicago

Alphabet GOOGL-owned Google is exploring the possibility of expanding its high-speed Internet service through its fiber-optic network named Google Fiber to the second and third largest metropolitan cities by population in the U.S., Chicago and Los Angeles.

Google launched its high speed Internet service — Google Fiber — in Kansas City, MO in Sep 2012. With the launch, the company intended to put pressure on major broadband providers like AT&T T Comcast, Verizon Communications VZ to upgrade their networks to support higher Internet speeds.

Google offers speeds of up to 1,000 Mbps (1 gigabit per second) for $70 a month, which is about 100 times faster than the average broadband service in the U.S.

Google Fiber is already available in 20 cities including Kansas City, TX, Austin, and Provo, UT and is building or planning to build its network in five more including Salt Lake City, Nashville, Atlanta, Charlotte and Raleigh-Durham.

In September, Google announced its plans to expand its high-speed Internet service to San Diego and Irvine, CA and Louisville, KY.

The aggressive expansion plans reflect intensifying broadband competition. AT&T recently spread its super-fast Internet service into 38 more cities including some parts of Los Angeles.

But Google 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., Google is in a way pushing them to upgrade their own Internet services or lower prices. Since this will get users online more frequently, they are more likely to use its other online services, therefore driving its revenues.

Google has a Zacks Rank #3 (Hold). A better-ranked stock is NVIDIA Corporation NVDA sporting a Zacks Rank #1 (Strong Buy).

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