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  • Writer's pictureTeresa Mastrangelo

Broadband Flavor of the Month: Multi Gigabit Broadband

While many households across the United States are still waiting to get even adequate broadband (that is broadband that meets the minimum definition set by the FCC at 25Mbps/3Mbps), operators are rapidly launching multi-gigabit broadband in the form of 2Gbps and 5Gbps (and even one at 10Gbps).

Why? Because they can.

Is there demand for it? The jury remains out except for those that simply just want to say that they have it.

Do consumers need it? I can justify the need for some businesses, but for the majority of homeowners unless they are mining bitcoin; producing 4K video or a VERY heavy gaming player, it is highly unlikely they will be able to take advantage of the speeds. There are simply too few applications that would require that type of speed.

You can’t make the argument related to smart homes because those solution providers have gone out of their way to develop products that do NOT require large sums of bandwidth.

At this stage of the game it is a pure marketing ploy and a competitive tactic. A way to convince consumers that they need something they really don’t and to convince consumers to switch providers in order to capture more market share.

But it might also be simpler than that – a way to drive higher ARPU.

Let’s take a look at AT&T (since they are public and publish all this great information.).

AT&T announced that it was offering 2 Gbps and 5 Gbps symmetrical services to 5.2 million residences and small businesses in more than 70 metro markets.

The Fiber 2 GIG service is being marketed for $110/month to residential customers; while business customers will pay $225/month. The Fiber 5 GIG is being marketed for $180/month for residential customers and $395/month for business customers. Business customers get 24/7 support, but other than that I can see no other reason why the service cost more than 2x per month.

According to AT&T’s 4Q21 earnings, the average broadband ARPU for consumer wireline is $55.96. This is only a 9 percent increase in 2 years, despite fiber subscriber growth of more than 50 percent.

Considering that the current monthly pricing for fiber products is as follows:

  • 300Mbps: $55

  • 500Mbps: $65

  • 1Gbps: $80

would lead me to ascertain that a large portion of subscribers are on the lower fiber tiers. So, who exactly is going to be buying these 2G and 5G products?

The real issue that is rarely addressed as operators roll out multi-gigabit services is the fact that most devices cannot support multi-gigabit speeds. Each device has a maximum internet speed it can reach, which may be well below the service that a consumer is subscribed. For example, if your computers only support 11Mbps and you have 1Gbps internet service, your computer will never be able to reach the more than 11 Mbps.

And let’s not forget that your connection is only as fast as the slowest portion of the network.

Service providers offering multi-gigabit services are making sure to caveat these services by stating:

Internet speed claims represent maximum wired network service capability speeds to the home and recommended setup – i.e. direct Ethernet connection. “


“Optimal performance requires Wi-Fi 6 enabled devices”

Additionally, besides a new ONT that will be provided by the service provider: all of these multi-gigabit services will require additional equipment on the part of the consumer. Some are provided by the operator, while others (such as Google Fiber & Ziply) are requiring the customer to provide their own compatible router and SFP+ module to plug into the router that meets the following requirements:

  • WiFi 6 standard (802.11ax)

  • 10G WAN port

  • At least 2.5G LAN port for 2Gbps services

  • Greater than 5G LAN port for 5Gbps services

In the case of Google Fiber, they are recommending an enterprise level multi-gig switch in your house ($200-$400), while Ziply offers a package for only $500.

But hey, if you are willing to spend $200 month for your internet service, what is another $400?

Examples of Multi-gigabit pricing:

Source: broadbandtrends

AT&T is clearly the largest broadband operator to launch these super-speed services and it is no surprise as they are rapidly upgrading their network to XGS-PON (a 10Gb symmetrical PON technology). Besides raising the monthly ARPU for its broadband services, AT&T is hoping to get out ahead of its cable competitors as they begin their move towards the 10 Gigabit platform.

However, to date, only Comcast has really demonstrated any momentum on multi-speed gigabit services, with an early launch of 2Gb services back in 2015 in a handful of cities where they faced strong FTTH gigabit broadband competition. In these markets, Comcast recently upgraded its Gigabit Pro service to deliver speeds of 3Gb (symmetrical) for the affordable sum of $299.95 per month (with a two-year contract). This is likely in direct response to Google Fiber offering a competitive 2Gb product for less than half the cost.

Not to be outdone and keeping with its leading edge philosophy, EPB has skipped 2Gb and 5Gb entirely and are currently offering a 10Gb service to the residential market for $299 per month.

Final Thoughts

Telcos are making headway as they deploy more fiber based services. However, in the U.S. market cable operators continued to hold a commanding lead in market share at 66 percent. And I don't see multi-gigabit speeds changing this positioning anytime soon.

While multi-gigabit broadband services make for great marketing and advertising; the lack of applications that require these speeds, and the fact that most consumer internet devices are unable to support these services, make it simply a "bragging-rights" play for most consumers.

(And personally, I am not sure I want that ugly multi-gigabit switch sitting in my living room)

But as someone that has covered the broadband market for more years than I want to admit, I would rather see operators offer ubiquitous and affordable gigabit broadband services, rather than multi-gigabit at this stage and save the super speeds as a competitive differentiation when warranted.

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Chris Conder
Chris Conder
Jan 31, 2022

while over here in the UK we built our own gigabit broadband network, we own it and run it and we pay £30 a month for gigabit symmetrical and £150 a month for 10 gigabit symmetrical. Not bad going for a bunch of farmers.

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