Haynes & Company, a leader in innovative grassroots research and analytics for institutional investors, announced additional findings related to its study of Google Inc.’s high-speed fiber optic internet service in Kansas City. Google is considering bringing its ultra high-speed Internet network in Phoenix, Scottsdale and Tempe.
Google launched the ultrafast internet service in Kansas City beginning with its community-led “pre-registration” program in 2012. Turning to this new model for deciding where, and when, to launch its 1GB service plus its first-of-its-kind, lifetime free service option hold the potential of closing the “digital divide”. To assess the impact of the roll out, Haynes & Company sent a team of researchers door-to-door in six, low-income neighborhoods to gauge both the awareness and the adaptation of the fiber optic service.
The most compelling takeaway was that only 16% of households surveyed had subscribed to the service. However, in a bright spot for Google, the vast majority (81%) of those households that have not yet subscribed had heard of the service, resulting in a 97% product recognition rate for Google Fiber. Moreover, of those households that had heard of Google Fiber but were not yet subscribers, 37% rated themselves as likely to sign up in the next 12 months. And, a full 12% said they would definitely sign-up.
“While the adaptation rates are relatively low, Google’s efforts are paying off in that consumers are well aware of the product,” said Elizabeth Haynes, Founder and President, Haynes & Company. “However, what we also found in speaking to people is that one thing that is keeping them away is cost, this despite Google’s attempt to structure appealing payment plans.”
Twenty-three percent of those likely to sign up in the coming year cited cost as a factor that could keep them from switching or installing Google Fiber.
The Google Fiber service, which costs $70 a month, offers speed of one gigabit a second, about 100 times faster than the national average. A slower service – about half the speed of the national average – is free after a $300 installation charge. It is this free service that holds the greatest potential for closing the digital divide for lower-income customers.
As Google continues to roll out its fiber product, Haynes & Company believes that significant opportunity remains to capture market share; however, it will require providing more than just access.
“Google has a real foothold in the mobile phone market with its Android operating system, and they should leverage that,” added Haynes. “For example, by bundling the one-time installation fee with mobile-phone plans and having Google Fiber available for sign-up in carriers’ stores where benefits of the service can be reinforced, we believe Google could markedly increase the uptake rate for the free service.”