Google Fiber plans to offer high-speed Internet service in several cities in Arizona, Colorado, Idaho, Nebraska and Nevada over the next few years as part of its first major expansion since it spun off as an independent unit of Alphabet Inc. in 2015.
In his first media interview since becoming chief executive officer (CEO) of Google Fiber in February 2018, Dinny Jain told Reuters on Wednesday that his team was finally ready to “add a little more build speed” after more than four years of sharpening.
The expected expansion to 22 metro areas in the United States, up from 17 today, includes previously announced projects to launch in Mesa, Arizona and Colorado Springs, Colorado. The selection was based on the company’s findings about where speed was lagging.
“10 years ago, the impression was that Google Fiber was trying to build the whole country,” Jain said. “Here we are gesturing, ‘No, we are not trying to build the whole country.’
Jain declined to comment on Fibre’s financial results or fundraising plans.
3-5 year expansion plan
Some of Alphabet’s other subsidiaries received extraordinary financing to independently prove their value, were closed or spun off. Fiber could face a similar choice if expansion materializes over the next three to five years.
The growth plan comes as Alphabet and other companies are slowing hiring and closing some marginal projects as concerns about a global recession grow.
“The intention is to create a business that is successful on its own, and that’s exactly what we’re trying to do with Google Fiber,” Jain said. He added that the company cannot count on dipping into the “wallet of rich parents.”
In 2010, Google began battling Internet service leaders such as Comcast Corp and AT&T Inc, with co-founders Larry Page and Sergey Brin saying they were tired of waiting for Congress to push the industry toward higher speeds at lower costs.
The project worked. Competitors have struggled to match Google Fiber’s gigabit-per-second offerings in initial launch sites like Austin, Texas, and even Los Angeles and other areas under consideration.
“We were so paranoid,” Jain said of his previous role as chief operating officer of Time Warner Cable.
But in 2015, Google separated its core business from other bets such as Fibre, drone delivery vehicles and anti-aging solutions. Breen and Page also relinquished some control.
Fiber had to cover annual losses of hundreds of millions of dollars that went into construction, experimenting with new ways to ground fiber optic cables and subsidizing some services.
While Wall Street has maintained cost controls and transparency, Fiber has minimized expansion in West Des Moines, Iowa and within existing metropolitan areas over the past few years. Jain honed processes and ditched bad time-saving ideas like taping cables to sidewalks.
Last year they built more than in the previous years combined.
“We had to move from an ethos and culture of massive innovation to operational excellence,” says Jane.
The fiber retains some advantage in its form. Digging shallower trenches than others should save time, while streamlining pricing and setting up to limit calls for help from customers should keep costs down.
Jain said customers connected to Fiber at a third of what he had seen with similar companies, and he described sign-ups as “very healthy” and higher than he expected before joining.
Jain added that Fiber will continue to provide wireless services through its Web pass brand for multi-family buildings. In some cases, it will lease local fiber networks from other providers.