Most wired telecom players are responding in kind to the threat that Google Inc (NASDAQ:GOOG) Fiber represents. Following a slew of announced expansions by Big G earlier this year, incumbents have been firing back.
AT&T Inc. (NYSE:T) said it would launch a similar service in Austin if it could score the same local incentives as the search giant. Regional and local operators in Vermont, Nebraska, Seattle, and Minnesota have all announced gigabit connections. At least one company isn’t worried, though: Verizon Communications Inc. (NYSE:VZ).
Big Red just announced a new service level for its existing FiOS fiber optic network, but the pricing and speeds are hardly competitive with what Google Inc (NASDAQ:GOOG) Fiber promises. Verizon Communications Inc. (NYSE:VZ)’s new service offers a 500 Mbps connection, but that extra speed costs a whopping $310 per month. That’s half of Google Fiber’s speed limit and at four times the cost. Clearly, Verizon is not overly concerned with Google Fiber. Besides, the two newly announced Fiber cities aren’t on Verizon’s turf anyway.
There are a couple possible explanations for Verizon Communications Inc. (NYSE:VZ)’s lack of urgency. First, most of Verizon’s growth these days comes from its wireless business, as opposed to the wired side. Verizon has a total of 5.8 million FiOS Internet subscribers, which pales in comparison to its 100.1 million retail wireless connections.
The company is more concerned with trying to buy out Vodafone Group Plc (ADR) (NASDAQ:VOD)‘s 45% stake so it can keep all that growth to itself. Verizon Communications Inc. (NYSE:VZ) also stopped building out its FiOS network years ago due to intense competition, so the new service will only expand within its existing footprint. It’s not like Verizon is investing heavily in FiOS like it is with its wireless infrastructure.