Report: GFiber parent Alphabet seeks outside investment as part of spin off strategy

Metro fiber to the premises (FTTP) player GFiber is seeking external investment to capitalize its expansion. Reuters (via yahoo! finance) reports GFiber’s parent company Alphabet has retained an investment bank to start the process of selling equity in the company, citing a source close to Alphabet's efforts.

Reuters quoted the source as saying the goal is to spin off the unit, formed in 2010 as the nation grew impatient to migrate from its legacy copper telephone service delivery infrastructure to fiber-delivered Internet protocol-based voice, video and data.

"This next step of raising external capital will enable them to scale their technical leadership, expand their reach, and provide better internet access to more communities," Ruth Porat, Alphabet's president and chief investment officer, told Reuters in a statement. 

GFiber’s debut -- branded as Google Fiber -- was enthusiastically welcomed by localities looking for a more rapid alternative to bring fiber connections than the slow walking legacy incumbent telephone companies. But the company faces the same high capital expenses that come with utility infrastructure construction. It identified no overwhelming technological or marketing advantage over the incumbents as a Google 10X project, throttling back expansion plans in 2016, most notably and somewhat embarrassingly in its Silicon Valley region headquarters. "There’s no flying-saucer shit in laying fiber," Google co-founder Larry Page later explained.

In a move similar to Alphabet’s seeking outside investment capital for GFiber, AT&T in late 2022 entered into a joint venture with private equity firm BlackRock to build fiber connectivity to an initial 1.5 million customer locations beyond AT&T’s current footprint branded as Gigapower. Gigapower CEO and retired AT&T executive Bill Hogg, asserted in 2023 that Gigapower will be “much larger than any other provider in the space. The scale at which we are going to operate will be a differentiator in the U.S. marketplace.”

GFiber parent Alphabet’s move appears aimed at rivaling Gigapower’s plans. GFiber has a presence in 18 states and plans to expand to 25 new metros, finalizing a franchise for the Las Vegas metro this week, a metro also on Gigapower’s target list. It too will be entering the metro, according to the Las Vegas Review Journal.