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1.5.2 New market entrants – for example, the presence of utility conduits
avoided the need for digging up streets. Chapter 1
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New market entrants typically try to address gaps Analysts estimated that it would cost close to USD
in the existing market. For example, ISPs will focus 84 million to pass 149 000 households in Kansas
on generating connectivity-based revenues, while City, resulting in a cost per household of USD 564.
organizations operating higher up in the Internet The cost to acquire and connect a broadband
value chain (traditionally not ISPs) can benefit customer, meanwhile, was estimated to be USD
from a strong Internet ecosystem that allows their 464 .
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Internet services to be more widely used.
A key differentiator of Google Fiber’s value
The approach taken by new entrants can vary proposition was its high-speed broadband service,
based on the market context. In established which offered speeds of up to 1 000 Mbit/s.
economies, the opportunity is likely to stem from The reaction from other broadband providers
existing broadband providers’ lack of motivation was nearly immediate; in August 2014, Comcast
to invest in their legacy networks. In this scenario, and Time Warner announced that they would
the new entrants may be required to compete increase their Internet access speeds to customers
head-to-head with the established players, in Kansas City . And in February 2015, AT&T
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pushing those incumbents to improve their service announced that it would match Google Fiber’s
offerings. In developing markets, however, the price and speed in the city, as well .
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issue is more a lack of infrastructure, and even the
established providers may not have the funding In its "Google Fiber City checklist," the company
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to roll out and maintain the comprehensive listed the requirements that applicant cities
network. In this case, the new entrant may partner needed to meet to be considered as candidates
with one or more existing providers, or even the for future network expansion. An attractive
government, to share the infrastructure costs. In environment for Google Fiber to expand would
the case of Google Fiber in Uganda (see below), offer:
Google may have funded the entire project.
• transparency about existing infrastructure;
Case study: Google Fiber, USA
• clear rules about gaining access to that
infrastructure; and
Governments and regulators need to create the
right environment to attract investment from new • facilitation of permitting and construction
entrants. This case study describes how Google,
a global player whose traditional core business is licences.
to provide services over the Internet, decided to
invest in broadband network infrastructure and Currently, Google Fiber covers three cities, and
offer broadband services to ISPs and end users. there are expansion plans for five more across the
United States.
Google Fiber’s initiative was driven by its ambition
to "help make Internet access better and faster for Case study: Google Fiber, Uganda
everyone." In 2010, Google saw an opportunity
to offer end users high-speed connectivity in a Google Fiber’s investment in Uganda, meanwhile,
handful of cities where operators did not offer demonstrates that the approach Google took
high-speed broadband services. Its motivation for in the United States can also be replicated in
investing in fibre networks has been to provide developing markets. In this case, Google Fiber did
more opportunities for Google to generate not compete with broadband service providers.
revenues from advertising and content in addition Rather, it chose to sell them wholesale services.
to broadband subscriptions.
The lack of adequate infrastructure in Uganda has
In December 2012, Google Fiber started offering been a barrier to high-speed broadband availability
fixed broadband and TV services over its fibre- and Internet maturity. For Google, this situation
to-the-premises (FTTP) network in Kansas City. has hindered its ability to grow revenues in that
That city was chosen for its good economic market from online advertising, its core business.
infrastructure and a business-friendly environment According to the ICT Association of Uganda, there

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