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Google Fiber has cost less than $100 million to launch so far

Published Apr 8th, 2013 7:58PM EDT
Google Fiber Nationwide Cost

Google’s (GOOG) gigabit broadband Internet service has been well received by the lucky few who have it, while the rest of us have been left eagerly awaiting for it to arrive in our hometowns. Google Fiber is currently available in Kansas City, Missouri and Kansas City, Kansas, and is rumored to be launching in Austin, Texas later this year. Carlos Kirjner and Ram Parameswaran of Bernstein Research estimate that it cost Google $94 million — $42 million in Kansas and $52 million in Missouri — to build the Fiber infrastructure and connect homes in its current markets, TechCrunch reported. The analysts believe the rumored Austin rollout will cost the same or even less than the offerings in Kansas City, although they remain skeptical of a nationwide build out.

“We remain skeptical that Google will find a scalable and economically feasible model to extend its build out to a large portion of the US, as costs would be substantial, regulatory and competitive barriers material, and in the end the effort would have limited impact on the global trajectory of the business,” they said.

The analysts estimate that if Google were to build out a fiber network over the next five years to cover another 20 million homes, it could cost the company an upwards of $11 billion even before connecting a single house. Earlier estimates from Goldman Sachs suggested that a fiber network covering 50 million houses would cost around $70 billion to deploy.