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Google Not Trying to Be Major Telco Rival, Says Exec

Iain Morris
10/10/2016
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LONDON -- Ovum Digital Futures -- Google has refuted suggestions that it is trying to establish itself as a major network rival in the telco sector despite its various activities in this market.

Mike Blanche, who heads up strategic telco relationships for the search engine giant, said Google (Nasdaq: GOOG) is competing against telcos in only a small number of areas and regards itself chiefly as a partner to those organizations.

"We're 80% partner, I would say… and 5% competitor," said Blanche during the Digital Futures event hosted by analyst firm Ovum Ltd. in London last week. "It's true we compete with operators in a few areas but not as many as you think. We don't want to be the world's ISP."

Breaking down Google's relationship with telcos, Blanche said his company was also "10% supplier, giving you tools to help build your business, and 5% customer."

This is not the first time the Google executive has denied that his organization is setting itself up as a major telco rival. Just last month, Blanche was reported by Tech Week Europe to have made exactly the same remarks about not wanting to be a global ISP.

The repeated denials clearly reflect the growing concern that Google poses a threat to operators through its own telco-like activities.

Like other so-called over-the-top players, Google has launched various web services that allow customers to make phone calls or send messages without using traditional telco offerings.

Perhaps more worryingly, it has also taken steps into the access networks business. Its Google Fiber subsidiary has been rolling out high-speed fiber-to-the-home networks in a number of US cities and has recently been experimenting with fixed wireless access technologies. (See Google Fiber Now a Wireless ISP!.)

Through Project Fi, meanwhile, Google has established itself as mobile virtual network operator in the US, offering wireless services directly to customers on infrastructure owned by Sprint Corp. (NYSE: S), T-Mobile US Inc. and US Cellular . (See US Cellular Joins Google's Project Fi.)

In July, the company also struck a deal with Hong Kong's Hutchison Whampoa Ltd. (Hong Kong: 0013; Pink Sheets: HUWHY), which operates mobile networks in several European markets, to support Project Fi customers traveling overseas.

Hue, a wholesale business set up by Hutchison, will act as a mobile virtual network enabler for Google, providing connectivity in European markets. (See Is Google Becoming a European MVNO?.)

Uncertainty surrounds Google's ambitions, however. The typical analyst view is that Google is merely experimenting with access network technologies and services to see what is possible and pressure telcos to up their game. (See AT&T & AWS: Heavy Reading's View.)

Although Google has the resources to fund major network deployments, it may see little incentive in becoming an operator, which would present an entirely new set of business and regulatory problems for the company.


Want to know more about cloud services? Check out our dedicated cloud services content channel here on Light Reading.


Even so, telcos are evidently concerned about the challenge from Google and other web-scale players. In a survey recently carried out by Heavy Reading , 63% of telco respondents identified Google as the web-scale Internet company that posed the most significant competitive threat to their own business activities.

As Heavy Reading points out, many telcos have been prepared to set these fears to one side and form partnerships with Google, given the value of its various assets. Yet they are also making investments in software and virtualization technologies -- already pioneered by major Internet players -- in the hope of acquiring web-like capabilities of their own.

One objective is to be able to launch new services more speedily and efficiently than is currently possible through a traditional telco approach.

Edge computing could become another battleground between telcos and web-scale Internet companies. By deploying IT resources in access networks, and much closer to the end user, some operators believe they could offer performance-related advantages over more centralized cloud providers. Yet Google and its ilk also have an eye on the edge-computing opportunity, as well as the funds to deploy edge-computing infrastructure on a grand scale. (See Telcos Give Vent to Edge-Computing Anxiety.)

As the man in charge of Google's relationships with telcos, Blanche is understandably keen to play down any sign of friction and preferred to focus on instances of collaboration during Ovum's recent event.

In one example, he says, Google has been working with systems integrator Accenture and Dutch telco KPN Telecom NV (NYSE: KPN) to improve the efficiency of field engineers at local exchanges.

According to Blanche, the companies developed a system that provided engineers with on-the-spot information about jobs and work schedules and even led to an improvement in end-customer satisfaction.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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kq4ym
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kq4ym,
User Rank: Light Sabre
10/17/2016 | 2:13:31 PM
Re: I also believe in the tooth fairy
It will be interesting to see in a few years if Google's estimates prove trustworthy. With  saying it is 80% partner and 5% competitor while being also 10% supplier, and 5% customer. one might wonder why Google would put itself in a position of memorializing those numbers.
gaditamari
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gaditamari,
User Rank: Light Beer
10/13/2016 | 9:45:56 AM
Encription
If Google truly wishes to court ISP they would have them able to manage encrypted files. Roth now google encrypt up to 80% of its delivered content, effectively shutting our ISP ability to manage it, let alone profit or share profits from it. If an ISP "dares" to complain, they just bypass them.
gaditamari
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gaditamari,
User Rank: Light Beer
10/13/2016 | 9:41:03 AM
I also believe in the tooth fairy
:-)
pdonegan67
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pdonegan67,
User Rank: Light Sabre
10/11/2016 | 12:25:08 PM
Re: Google as service provider Partner/Competitor
Yes, to your point, the CSP survey results we include in the WIC report do point to CSPs recognizing Google as much more of a competitive threat than any of the other WICs.

But the survey results also show a strong interest  among CSPs in collaborating with Google as a business partner as well.
davidgfraser
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davidgfraser,
User Rank: Light Beer
10/11/2016 | 12:13:34 PM
Re: Google as service provider Partner/Competitor
Google's intentions don't seem entirely clear yet but, whatever they may be, you wouldn't expect Google to announce itself as a threat, right? Where Project Fi is concerned the real disruption is in a model that positions the individual host networks as just constituent parts of an overall service. It achieves network scale by aggregating multiple resources, and then moves its customers between those networks as it sees fit.

Yes Fi is supported by three network providers, which doubtless have identified the upside. But what strikes me as more interesting is what this model might mean for the role of the mobile operator more widely. Whether or not Google will seek to replicate this in other markets remains to be seen but, in one sense, it doesn't have to. It's proved the model can be made to work.

The idea of a service which gives the consumer the best connectivity in the moment from a range of suppliers is powerful and has the potential to be disruptive on a grand scale. The results of the Heavy Reading survey into operator views of the Web Scale Internet Companies certainly suggest, as you say, that there are some serious concerns out there.
GregW333
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GregW333,
User Rank: Lightning
10/11/2016 | 11:50:01 AM
Google Wins Regardless
Even if GoogleFiber isn't a real businsess (I'm not convinced it is) they still WIN.  Google/Alphabet will make more ad money with 4K ads than 1K ads for example.  The broadband ecosystem benefits regarless as well...Consider what GF has done...
  1. Proved that gigabit networks can be built, operated and maintained.
  2. Proved there is a demand for "up to" a gigabit services and stimulated the halo effect
  3. Caused incumbents to react and announce their own gigabit rollout plans
  4. Added fuel to the Community Broadband uprising since no one wants to be on the wrong side of the widening digital divide
  5. Completely tanked the Bits/Dollar economics

 

For the rest of the article please see

 

 https://www.linkedin.com/pulse/googlefiber-just-another-over-builder-cool-brand-name-greg-whelan

 
jbtombes
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jbtombes,
User Rank: Light Sabre
10/11/2016 | 9:54:15 AM
Re: Googfe as service provider Partner/Competitor
Agree on experimentation. Just that what's a little experiment to Google can look pretty threatening to some of the smaller operators. 
KBode
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KBode,
User Rank: Light Sabre
10/11/2016 | 9:10:34 AM
Re: Googfe as service provider Partner/Competitor
And in addition to the wireless partnerships Google's global broadband efforts (drones, WiFi) really are more focused on being supplemental (as opposed to the direct competition of Google Fiber) so his comments certainly make sense in global context.
danielcawrey
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danielcawrey,
User Rank: Light Sabre
10/10/2016 | 2:00:09 PM
Re: Googfe as service provider Partner/Competitor
I think this is all about experimentation versus Google actually wanting to be an operator. Some of this probably comes from the fact that the company was getting impatient over the development of fiber services.
pdonegan67
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pdonegan67,
User Rank: Light Sabre
10/10/2016 | 7:02:24 AM
Googfe as service provider Partner/Competitor
It's clear from Mike Blanche's comments that Google very much wants to court the service provider community now.

And that the traction that Facebook and AWS in particular are seeing here is driving Google to reach out more publicly and more determinedly than it has in the past.

I agree with him that Google's stance is increasingly collaborative. Google Fi may be competitive with AT&T and Verizon, for example, but let's not forget that it's also supported by T-Mobile, Sprint and US Celllular.

I don't think most service providers will see Google as 80% partner and 5% competitor, though. I would think the  Webscale Internet Company  doth protest a little too much inviting them to buy a into proposition that's as heavily loaded as that.

But Google as primarily a partner for service providers now and going forward?

Yes I do buy that.

Although let's not forget that Google's direction of travel is almost certainly being given some impetus by the far less conflicted collaborative stances of its major rivals.
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