It’s always good to see one company’s action forcing every competitor to enhance their service and the price to stay in the business, because in any case it’s a win-win situation for end users as long as it’s implemented properly. This is a classic example as the presence of Google Fiber and its expansion throughout United States is forcing Internet Service Providers to significantly boost their offerings in their packages before it’s too late.
Time Warner and Comcast does have the infrastructure and capacity to significantly boost the internet speed for the benefit of its subscribers and always could do so as said by an analyst of Bernstein Research, Craig Moffet. He also said that the companies make 97% profit margins on internet services alone.
To those who don’t know, Google Fiber provides 1 Gigabit internet connection and started from Kansas City, then expanding to Austin, Texas and then Provo, Utah. What’s makes this very interesting is that this speed is 100 times more than what an end user gets on an average.
Akamai states when Google Fiber was implemented in Q4 2012 at Kansas City, there was a massive jump in average internet speed consumption in comparison with Q4 2011, showing a boost of 84%. The second highest boost that was observed during this time was in Wyoming with 51% boost. David Belson did publish Akamai’s ‘state of internet report’ noted:
“It could be the case that the other incumbent providers were going, ‘Oh, crap, we stand to potentially lose subscribers to this deal with Google if we don’t provide competitive service,’”
Now that the gigabit speed implementation has help the customers to have one more option to seriously consider, it will be interesting to see how the average internet speed consumption rates after a period of time, and which companies benefits and suffers in gaining and losing their subscriber base.
Source: Technology Review