Survey finds Google Fiber getting high take rates in Kansas City

by Steve Blum • , , ,

If the hare has staying power, the tortoise will lose.

Google’s early results in Kansas City have to be giving incumbent carriers the shakes. According to a survey done by Bernstein Research, one-third of the homes in neighborhoods where Google is already offering Internet and television service have signed up. And even more are thinking about it.

Bernstein surveyed 200 homes in the relatively small area where Google Fiber is up and running. One-third were already taking the service and of the rest, about three-quarters were thinking about it. Most Google Fiber subscribers were paying a monthly fee for service. Bernstein estimated that only ten to fifteen percent opted for the free-ish tier: pay an up front installation fee of $300 and get 5 Mbps at no further cost for seven years.

It’s easy to read too much into these findings. Google picked its first “fiber-hoods” on the basis of pre-commitments from households, so fast uptake is not particularly surprising. Even so, it’s about double what other fiber overbuilders are seeing, including the city-owned system in Provo, Utah that Google just acquired. The take rate there is estimated to be in the 15% to 20% range, a figured matched in the neighboring Utopia fiber-to-the-home system.

Google has a stone simple selling proposition – 5 Mbps free, $70 for a gig, $120 for a gig plus 200 TV channels – that’s reinforced by a well known and trusted brand identity. If its share just pulls even with the competition in high margin market segments, which it appears to doing so far, it could wash away their profits.

That’s the competitive threat that cable and telephone companies are reacting to now.