If you were starting a broadband carrier from scratch today, would you include traditional home phone service as a part of your bundle? If you are Google, apparently not. They have decided not to include voice service as a part of their Google Fiber service bundle in the Kansas City market.
What is interesting with this decision is that Google has apparently even passed on a pure IP voice play with Google Fiber. “We looked at doing that [VoIP]. The cost of actually delivering telephone services is almost nothing,” Milo Medin, vice president of Google Access Services is quoted as saying by the Kansas City Business Journal. “However, in the United States, there are all of these special rules that apply.”
I assume those ‘special rules’ that Medin is referring to include interconnection, USF/Connect America Fund, and probably some local regulations as well. Google took a look at them and said “no thank you.”
Google made a judgment call, and voice did not make the cut. They’ve determined that their 1 Gbps FTTH network and IPTV is enough to compete with the triple play bundles of Time Warner Cable, SureWest, and AT&T. It will be interesting to see how the market responds.
Google is basically saying, if customers want voice service, they’ll find a way, either through some OTT voice provider that rides their FTTH access network, or through cell service. To them, voice service didn’t create enough incremental revenue to be worth the “hassle.”
This move illustrates an interesting path for traditional voice service. That is, there is a perception by many, that traditional home phone service is becoming an app that customers can choose to utilize or not over their broadband connection. Positioning a voice product for this path is a question that traditional voice service providers need to answer.
Does your voice product have a path towards this potential app future? If so, there may be a lot of Google customers in Kansas City, and beyond, who may be interested in it.