As Google Fiber apparently discovered, one of the most-significant variables for any “overbuilder” in the internet access business (a third competitor in markets served by a telco and a cable company) is the adoption or penetration rate, since the other two legacy providers have nearly 100-percent market share.
As was the case for overbuilders in the video entertainment business, and now with triple-play and internet access overbuilders, it has proven difficult to reach 20 percent market share after several years of operation.
Tucows, an overbuilder constructing gigabit internet access networks in a number of mid-sized towns, believes it eventually will reach 50 percent adoption rates in its markets after five years, a stunning figure that has been seen once or twice in U.S. overbuilder markets, but an achievement that remains quite rare.
At that level, an overbuilder would become the likely leader in its market.
Even expectations for the immediate future are healthy. “We expect to see 20 percent adoption among serviceable addresses in a year and 50 percent in five years,” says Elliot Noss, Tucows CEO. Generally speaking, an overbuilder with 20-percent share and control of its operating costs reasonably can expect to survive.
Tucows estimates that its Ting Internet operations will continue to require about $2,500 t0 $3,000 per customer in capital spending.
In Charlottesville, Virginia, our customer installs continue to increase every single month and we continue to be limited only by city permits, serviceable addresses and installed capacity, said Noss.
Westminster, Maryland; Centennial, Colorado and Sandpoint, Idaho also are expected to go commercial in 2017.