October 10, 2016
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.
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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, , News Editor, Light Reading
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