Tuesday, March 29, 2016

Google Fiber Adds Voice Services

Google Fiber customers now have the ability to buy phone service for an incremental $10 a month. In the past, Google has maintained that voice service was a rather low priority for its Google Fiber service, with video entertainment a more-logical and important companion service.

The latest turn of events might suggest a couple of new lines of thinking. Perhaps Google now has found that gross revenue for its Google Fiber networks, even using the neighborhood approach, is simply not high enough with just two services to sell.  

Perhaps the move suggests voice now is believed to be an important service element, either to attract new customers or retain them. Possibly there are other additional values that help justify adding the new service element.

Most likely all the above are correct: the consumer access business is competitive enough that revenue from the three foundation services is required, and competition is stout enough that a triple play offer is needed to remain competitive, even when Google Fiber has an advantage with its Internet access offer.

As was the case for Google Fiber’s resetting of consumer expectations about the “right price” and “basic features” of an industry-standard Internet access service, the $10 a month price might also help reinforce expectations about what a fixed network voice service should cost.

The service also seems to build on Google Voice capabilities, to allow use of the service on PCs, tablets, smartphones as well as "phones."

One observation might also be that the U.S. consumer access business is robustly competitive. If Google Fiber believes it really has to be a triple play provider to make the consumer access business model work better, that suggests the hassle and low potential revenue of supplying voice services is necessary, despite its modest revenue contributions and not-insignificant costs.

source: Silicon Alley Insider

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