Alphabet is dramatically cutting back on its plans to expand its Fiber internet service nationwide. The company is laying off or reassigning about nine percent of its staff as well as "pausing" or ending fiber operations "potential Fiber cities" where it hadn't yet fully committed to building. Fiber will continue operations in markets where it already has a footprint.
Craig Barratt, CEO of Alphabet's Access division running Google Fiber, will step down from his post and remain only as an adviser. In a blog post announcing his departure, Barrat noted that Fiber’s business is solid, with its subscriber base and revenue are growing quickly, and more of that growth in the horizon — they’re just shifting strategy.
While the former CEO didn’t go into details about the future of Fiber, it’s no secret that the company has been rethinking how it delivers speedy broadband access, as rolling out a fiber network is a costly endeavor. Over the past year or so, Access has increasingly turned its sights to wireless technology as cost-effective alternative to delivering high speed Internet access to users, particularly with the acquisition of Webpass back in June.
Google Fiber is one of the units that make up Alphabet’s “other bets”, which are businesses outside Google’s core web search and internet services business. The unit reported revenue of $185 million in the second quarter of this year and an operating loss of $859 million, and as much as $280M of this was capital expenditure on Fiber.
Alphabet has not disclosed the number of Google Fiber subscribers in cities where the service is available. A report from The Information claims that the initial goal was to sign up five million subscribers in five years, but by the end of 2014 it had only signed up around 200,000 broadband subscribers, well short of expectations.
Google Fiber costs $70 a month for the fastest 1Gbps Internet connection or $130 a month when bundled with its TV service. It is currently available in Atlanta, Georgia; Austin, Texas; Charlotte, North Carolina; Kansas City in Missouri and Kansas; Nashville, Tennessee; Provo, Utah; Salt Lake City, Utah; and The Triangle in North Carolina.
Google Fiber is still committed to building in Huntsville, Alabama; Irvine, California; San Antonio, Texas; and Louisville, Kentucky.