Making some numbers about Google’s FTTH

Google said: “We plan to offer service at a competitive price to at least 50,000 and potentially up to 500,000 people.”

This means they will cover 500,000 people, thinking a family of 3, we get 166,000 new homes connected, and we can think about a less dense area and approximate it to 200,000 homes. From the same sentence we can extract an assumed 10% of market penetration reached after 3 years after the project start.

Another hypothesis is that those populated areas are not any dense concentration ones. Meaning that each deployment will need more fibre, but remember that fibre is not the big cost here, and Google will choose cases where it can deploy the first section in aerial way, giving to this kind of deployment a lower final cost per home.

Mixing all together it makes a project of nearly 664M USD, where we need to add a core network that can cost 200M USD, giving a total cost of 884M USD.

But not all the cost is going to be from Google’s part. As you know from their survey, they are searching motivation through inhabitants but also through councils / governments -> meaning that they are searching proactive councils that can help in the deployment of the project. Some council can accept aerial deployments, others can let their ducts infrastructures to Google’s deployment at a cheap renting price, others can share the installation cost in exchange of local television, or some services to the town hall.

Taking into account that it will be shared a 20% of the total roll out cost, makes that around 175M USD are coming from public funds and around 700M USD from Google. Taking into account that it will be shared a 20% of the total roll out cost, makes that around 175M USD are coming from public funds and around 700M USD from Google. Then, if we set cheap comercial prices for each connected home, we can set it around 29 USD, it will be enough to maintain the network, and start to gain some money after 25 years of having implemented it. It has been considered to reach a 30% of the total connected homes inside the first 25 years.

This means that is a long term inversion, and a great showcase for the brand. Writing about this project is making it more popular, so without deploying anything they are doing a big noise.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s