Alphabet, the parent company of Google, has apparently thrown in the towel on its aspiration to disrupt the fiber broadband industry.
Last week, the company announced it was spinning out its multi-city Google Fiber business, now called GFiber, and will sell it to Stonepeak, the investment firm that owns Astound Broadband.
Alphabet will retain a minority stake in GFiber when the sale is complete. The deal requires regulatory approvals from the Federal Communications Commission (FCC) and other entites. Financial terms of the transaction were not disclosed.
“Building on GFiber’s success as a leading independent US fiber internet provider, this is an exciting next phase of their growth,” said Ruth Porat, the President & Chief Investment Officer of Alphabet and Google. “GFiber will now have the opportunity to provide better internet access to more communities across the country as they combine with Stonepeak’s Astound business, while continuing to provide their award-winning customer experience.”
“GFiber has always been about pushing the boundaries of what’s possible for internet speed and service,” said Dinni Jain, the CEO of GFiber. “This partnership with Astound and Stonepeak is the next step in our decade-long mission to redefine what customers can expect from their internet provider. It’s a strategic opportunity to scale our customer-focused approach to connect more households to a truly different type of internet service.”
The deal gives Astound a significant boost in the fiber broadband market: GFiber currently serves nearly 3 million customers across 15 states, while Astound’s service — which is still mostly reliant on coax-based broadband — serves 4.45 million customers across 12 states. Astound currently ahs nearly 900,000 fiber passings.
The combined company is expected to compete for broadband business from the likes of AT&T, Comcast and Charter, which are all focused on building out their own fiber networks, and from other products like fixed wireless home Internet service offered by the three large wireless carriers and satellite broadband from Starlink.
The deal effectively ends Google’s aspirations of disrupting the broadband market with a pure fiber play. GFiber launched in 2010 with limited availability in Kansas City, with later expansion to parts of Utah and Texas.
The company offered traditional TV service over fiber until 2020, when customers were pointed to YouTube TV, Philo and Fubo as alternatives. Traditional TV service ended for legacy Google Fiber customers in 2022.
Google still operates in the broadband space with its wireless prepaid brand called Google Fi, which operates on T-Mobile’s network and offers unlimited wireless service for around $35 per month.
