Huntsville Now Will Have 4 Gigabit Providers
With the activation of gigabit internet access by Mediacom in Huntsville, Ala., four providers will be offering gigabit internet access in various parts of the city, including AT&T, Google Fiber and WoW.
As so often happens in competitive markets, there is no such thing as permanent competitive advantage. As Google Fiber starting building gigabit markets, telco and cable companies, and some overbuilders, responded in kind, though in most markets, only the cable operator offers ubiquitous gigabit service across its whole footprint.
What remains to be seen is if--or whether--market share actually shifts, after all the upgrades are completed and full marketing has had time to produce results. If CenturyLink’s experience is replicated, the biggest impact might not be significant shifts in market share. There might be some share shifts, but perhaps nothing too dramatic.
Instead, most of the suppliers might find that existing customers upgrade to higher-speed tiers, but perhaps not to full gigabit speeds. CenturyLink, for example, has found that after it begins marketing gigabit internet access, the biggest change is an upsurge of order for 40 Mbps service.
Perhaps ironically, the impact of gigabit access competition in Huntsville will not so much be to shift market share, but to incentivize speed upgrades by customers to new services that are faster than what they had been buying, but that fall short of full gigabit speeds. The revenue impact then depends on how ISPs adjust prices in the wake of gigabit tiers being added. Modest upward movement in average revenue per account is likely; big changes are not likely.