Google Fiber, Alphabet Inc.’s initiative to roll out high-speed broadband internet and TV to select cities across the U.S., is reportedly in disarray, according to a report from The Information.
The report claims Alphabet CEO Larry Page is unhappy with Google Fiber’s growth and has instructed Craig Barratt, who is leading the service’s rollout, to cut staff in half. Page also wants Barratt to reduce costs to one-tenth of its current rate.
According to The Information’s report, Google had expected Fiber to attract at least 5 million subscribers over the course of five years. Instead, progress has been far slower, with the service only landing about 200,000 by the end of 2014. From an outsider’s perspective, Fiber’s rollout across the country has appeared slow and methodical. But, according to a separate report from Fast Company, operating losses from Fiber and Google’s “other bets” were $802 million during the first quarter of 2016.
The problem is that Google has to create some of the infrastructure necessary to get Fiber up and running in cities across the U.S. This has proved to be not only time-consuming but immensely expensive. Alphabet spent $280 million on capital expenditures related to Fiber earlier this year, with revenues of just $166 million. With a gloomy rollout plan and astronomical costs, Alphabet CEO Larry Page wants Google Fiber to pull way back on the reins.
The Information’s report claims Alphabet is now turning its attention to wireless alternatives, which is cheaper and doesn’t require much new infrastructure to be laid in city streets. Right now, Google Fiber is available in only seven cities across the U.S., with five more on the way.
With Google Fiber’s staff reportedly being cut in half, it’s unlikely the service will grow much beyond that, especially if Alphabet is so keen on going wireless.