This report asks if Google is a threat to Telecom. By threat, of course, we mean competitive threat. The simple answer to this question is “YES!” As with many simple answers to complex questions, this leaves a lot unsaid. Some of what is unsaid would include questions as to the existence of a market to even be concerned about – surely Google doesn’t want to compete for the traditional wireline market, which appears to be dying. Would Google like to compete in the broadband market? From their activities in Kansas City it certainly appears that there is some interest there. What about mobile? The recent (but still awaiting regulatory approvals) purchase of Motorola assets by Google, suggest that they may want to get into the handset and other devices business. That business certainly has worked out well for Apple. Finally, who besides Google may be a major threat to the RBOCs? What about Apple or Microsoft?
All of these questions and others are addressed in this report. In 2010 we published a report on about the same subject, “Google and the RBOC’S.” This is an update of that report and a complete re-write of much of it. In terms of Google’s activities, 2010 is like ancient history. So, in this report we will try to move from ancient history to current events.
This report, focuses on the perceived strategies of Google, the RBOCs, and other “super-competitors.” The RBOCs that we will focus on are Verizon and AT&T. The report will use these companies’ public announcements and private interviews and the author’s years of experience in this area to develop a view of their strategies, comments on the strategies and likely outcomes. The report will provide forecasts on all the topics of interest.
We will start the report with a description underlying economic situation. Because of the overriding importance of the state of the US (and World) economy, we will provide a review of our forecasts for the nation’s economy as well as its impact on telephony. That portion of the report will also provide our forecast for capital spending over the next five years. The report will then continue with a review of the current telecom market structure. With that background, we will look in detail at the activities of Google and the major RBOCs. From these activities and the market structure, we will develop and present our view of each company’s strategy and comments on each. Forecasts will be provided for each of the areas addressed.
In addition to the strategies of Google and the RBOCs we will also look at some other major companies that may be in or coming to the telecommunications space in the US.
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