Alphabet divests majority of fiber subsidiary GFiber, but retains stake

Alphabet is selling so many shares of its fiber optic subsidiary GFiber (formerly Google Fiber) to an investment firm that the Google group will only remain a “significant minority shareholder” afterward. The US group announced this now and explains that GFiber is to be merged with the provider Astound Broadband as part of the takeover. The new company is to be managed by GFiber's current management. Alphabet expects this step to usher in an “exciting” next phase of growth. GFiber has recently massively scaled back the expansion of its fiber optic network.

Eventful History

Google Fiber was founded in 2010. As a Google subsidiary, the company laid fiber optic connections in various regions of the USA to offer people fast internet access. The company started in Kansas City, followed by other municipalities selected according to strict criteria. A city had to support the group in manifold ways to get the contract. In addition, social organizations in poorer districts were pressured to collect enough paid pre-registrations for Google Fiber. If not enough residents registered for a connection, Google Fiber would ignore those neighborhoods in its expansion. A free offer for social housing was abolished after a short time.

In 2016, the company then drastically scaled back the expansion of fiber optic connections and put almost all announced projects on hold. In some cases, all required preliminary work had been done and construction companies hired for the necessary work. Only in 2021 did the company resume fiber optic expansion, and now there are networks in 19 US states. Astound Broadband offers fiber optic connections in 10 US states and Washington D.C. Together, the new provider is now to continue to grow, and Alphabet assures that the minority stake reflects confidence in the future.

(mho)