Alphabet is spinning out its US Google Fiber business and combining it with Astound Broadband as part of a joint venture with private equity investor Stonepeak.
Contractors working on behalf of Google Fiber begin laying cable in a residential area (click to enlarge) – Pic credit: Sharkshock / Shutterstock
Google Fiber, now just GFiber, will merge with Stonepeak’s Astound Broadband to create a new network provider. Stonepeak will hold a majority ownership stake, while the existing GFiber executive team will run the company.
According to the pair, the move gives GFiber the external capital and necessary focus to drive its next phase of expansion, allowing it to buildout its fiber footprint across the US.
The agreement is subject to the usual closing conditions and regulatory approvals, and is expected to close in calendar Q4. Financial details of the transaction were not disclosed, and the corporations have not confirmed what name the conjoined business will operate under. We asked for more details and will update this story if we get answers.
Alphabet made Google Fiber public in 2010 and first introduced services in Kansas City two years later. Pitched initially as an experiment, the service aimed to provide ultra-high-speed broadband, with a 1Gbps connection said to be about 100 times faster than the top speeds available to most American users at the time.
According to some sources, Google’s aim with GFiber was to shake up the moribund American broadband market with a bit of competition, and to a certain extent, this has worked. However the expense of deploying and operating network infrastructure has proven a drag on its bottom line, which may be why Alphabet is planning to take a back seat.
Alphabet says it will remain a significant minority shareholder, reflecting its “confidence in GFiber’s growth opportunity and leadership.”
Astound Broadband was formed from the amalgamation of several other broadband providers, and acquired by Stonepeak in 2020.
The Google biz has a presence in cities in 19 US states, while Astound operates in 11.
GFiber chief exec Dinni Jain claimed the operation has always been about pushing the boundaries of what’s possible for internet speed and service.
“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.”
For its part, Stonepeak said it expects its deal to be “transformational” for their respective businesses. Senior managing director Andrew Thomas reckons GFiber and Astound’s combined networks and teams will better serve customers with next generation networks and ubiquitous connectivity. ®