Facing delays in constructing its 1-Gig network in Kansas City, Google (Nasdaq: GOOG) may be considering acquiring cable overbuilder SureWest (Nasdaq: SURW) as a way to quickly get its broadband pilot project off the ground.
Drexel Hamilton analyst Barry Shine said in a research note this week that a Google-SureWest deal could be in the works. "We see two potential positives for SureWest. It could either be acquired by Google, as Google did with Motorola Mobility (NYSE: MMI), or it could become a tenant on Google's network using it as an inexpensive way to significantly expand its footprint," Shine said.
While Google has insisted that it is on track to begin offering broadband service in Kansas City this year, the company hasn't said how it plans to construct its network. The Internet giant could pose more competition for cable incumbent Time Warner Cable (NYSE: TWC) in Kansas City.
SureWest is already offering wideband service in Kansas City. In December, the company began upgrading high-speed Internet customers receiving 10 Mbps service free upgrades to 15 Mbps service. It is also offering speeds up to 50 Mbps.
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