It's unlikely that Google (Nasdaq: GOOG) will attempt to expand the Google Fiber TV service that it will soon launch in the Kansas City area nationwide, Time Warner Cable (NYSE: TWC) CFO Irene Esteves said Wednesday, noting that it could cost $200 billion for it to build a nationwide fiber network.
Esteves (Image source: TWC)
"We can't imagine a model which makes sense for Google shareholders to expand," Esteves said at the Bank of America Merrill Lynch Media, Communications & Entertainment Conference in Beverly Hills, Calif.
Esteves pointed to the $30 billion that Verizon (NYSE: VZ) reportedly spent to expand its FiOS network to just 15 percent of U.S. homes. She asked, "What would it take to get national fiber--$100 billion, $200 billion?"
Esteves acknowledged that Time Warner Cable would feel the brunt of Google's deployment of a 1 Gbps network and pay TV service in the Kansas City market. She noted that there are 800,000 homes passed in the Kansas City area, including 600,000 homes passed by Time Warner Cable. Google's fiber-to-the-home network could eventually pass 300,000 homes passed by Time Warner Cable, Esteves said.
But Esteves added that Time Warner Cable counts just 100,000 video and 100,000 high-speed Internet subscribers in neighborhoods where Google is expected to offer service. "We're talking about 1 percent of our subs at risk," Esteves said.
Esteves called Google the "eighth competitor in the market," noting that Time Warner Cable already faces competition in the Kansas City area from DirecTV (Nasdaq: DTV), Dish Network (Nasdaq: DISH), AT&T's (NYSE: T) U-verse TV and cable overbuilders.
- listen to webcast from Esteves' appearance
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