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Summary

AT&T is expanding its U-verse GigaPower service, which uses fiber-to-the-home to provide broadband speeds up to 1Gbps, from 15 to 25 markets across the US. But the question is: Do consumers need gigabit broadband speeds? The answer is no, in my opinion, but consumers continue to sign up for GigaPower. The following internal dialogue of a real GigaPower customer (that’s me) might help explain.

Give me value – and 700Mbps is nice too

Being a telecoms analyst, I couldn’t resist the temptation to sign up for AT&T GigaPower the second it launched in my area. Especially after they dug up my street and yard, which was fun to watch, and didn’t take a long as you’d think.

But being a telecoms analyst comes with its drawbacks, including the need to analyze anything to do with telecoms. In the case of GigaPower, this led to an internal Q&A something like this:

Q: Do you need 1Gbps broadband?

A: Not really.

Q. Did you sign up for the service?

A: Absolutely.

Q: Any particular reason?

A: Because AT&T matched the prices of Google Fiber, which is also deploying in my area (though that service is not available yet). That meant I could switch from a double-play cable package with TV and 15Mbps broadband to a triple-play U-verse package with TV, phone, and 1Gbps broadband for about the same price: $150 a month.

Q: Sounds like a sweet deal.

A: Competition is a wonderful thing. And, actually, that reminds me – on the same day that Google Fiber announced it was launching in my area, AT&T started laying fiber in my neighborhood.

Q: Probably just a coincidence. Anyway, what’s GigaPower like?

A: The funny thing is, as soon as my GigaPower service was up and running, my first broadband speed test clocked in at an amazing…10Mbps downstream.

Q: Correct me if I’m wrong, but 10Mbps is 1% of 1Gbps.

A: You got it, math whiz. But after a few calls to GigaPower customer service, and a reboot of the GigaPower U-verse gateway, I was up to 90Mbps downstream and upstream.

Q: You’re getting close to 10% of 1Gbps, anyway. Maybe it’s a wireless issue?

A: No, this was via wired Ethernet from the gateway to PC.

Q: So what gives?

A: To cut a long story short, it turned out to be the PC – it’s a few years old and has a 100Mbps network card, so that was the main culprit. And, to be fair, the GigaPower support tools check a host of device issues that can slow the service, ranging from old network cards (wired and wireless) to processors that can’t handle gigabit speeds. In other words, 1Gbps is a lot faster than a lot of devices can handle.

Q: So other devices are faster?

A: I just got a new PC, which clocked in at 700Mbps downstream and 200Mbps upstream, again via wired Ethernet.

Q: That’s more like it. You’re up to 70% of the advertised speeds for downloads.

A: That’s right, an impressive number. But on the other hand, if we switch from wired Ethernet to Wi-Fi, the speeds drop way back, even with 802.11ac devices. The vagaries of wireless.

Q: Well, what’d you expect? Anyway, last question: Are you hooked? After 1Gbps broadband, is there no going back?

A: As long as it’s the same price as 50Mbps broadband, I’m hooked. Otherwise, not so much.

Q: Why’s that?

A: Because I got along fine with 15Mbps, and anything more than 50Mbps is probably overkill for my needs. But if companies like AT&T can deliver a triple-play service with 1Gbps broadband at the same price as my cable triple-play service with 15Mbps broadband, I’ll sign up the instant the service is available. (Which I did.) Plus, it gives me something to write about.

Appendix

Further reading

AT&T Update, June 2015, TE0001-000966 (June 2015)

FTTx: AT&T charts pragmatic strategy with both FTTN and FTTH, TE0009-001373 (December 2014)

Author

Mike Roberts, Practice Leader, Americas

mike.roberts@ovum.com

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