It seems very obvious at this moment what Google is doing. They are building a US nationwide Telecom operator but without the Telecom legacy. Look at the following Google equation:
GoogleTel = Ubiquisys (Femtocells)+ Bandwidth (Dark Fiber and 700MHz Spectrum) + Grand Central (One Number ID)
Google's femtocell investment allows for high speed wireless services (data and voice) in each consumers home. These femtocell base stations are sold for a profit to the consumer. Have you ever heard of a Telco installing base stations at a profit subsidized by the subscribers who use it? No, but you now have.
Google has been purchasing dark fiber in the US for many years. They will connect all their dark fiber to their new 700 MHz wireless spectrum throughout the US (if they win the auction). This national network will provide Google with unlimited bandwidth allowing them to commoditize bandwidth pricing in the US. This will force the cost of data to approach near zero and thereby lowering their OPEX and improving their margins. As subscribers utilize GoogleTel, Google will push advertising based on their wireless activities or location further increasing revenue and margins.
Google's acquisition of Grand Central simplifies their subscriber authentication whether the subscriber is using IP or PSTN. With Grand Central, Google has a their own HLR (mobile) /ENUM (IP) service. Perfect startup for GoogleTel.
Whether you call it GoogleNet or GoogleTel, it's the same US nationwide, unlimited calling and data plan with an SLA that typically is offered to operators but now for consumers. Time and innovation have served Google well.
This explains why Google has not hyped or bloated GTalk. In retrospect, its just another application residing on a PC. What Google wants is to be residing in your homes (femtocell), in your utilities (dark fiber) and in your air (700MHz).
Excellent work Google!
Sunday, July 22, 2007
GoogleTel = Ubiquisys (Femtocells)+ Bandwidth (Dark Fiber and 700MHz Spectrum) + Grand Central (One Number ID)
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11 comments:
Great insight. Google is the real telco disruptor! Thank you for this text. I have mashed it up with Don Reisinger's "Could Google kill the cell phone industry?" in my blog.
I guess there is a 700 MHz spectrum in every country, since analogue TV is being switched off worldwide until 2010. Imagine worldwide free Google telephony!
Let try this again, as my previous comment was deemed unpublishable or merely lost in bitspace. I might have been a bit terse and provocative in my previous comment, but wiping out on the captcha on the mobile a couple of times will do that to you.
First things first, great blog Thomas and keep up the good work.
Now then, to the issue at hand:
GoogleTel = It Makes No Sense!
If we for a second totally disregard the problems with femtocells (see Wikipedia or Dan Bubley's blog for details) and just focus on the basics you will notice that ALL femtocells will require some forms of backhaul. Oops, forgot about that one, now did you, Thomas?
So unless you propose Google build some kind of last mile access network your "solution" will not work.
- Zed
Hello Zed,
I propose that GoogleTel utilize the subscribers existing internet access (cable internet connections preferably) to connect the subscriber's residnet Femtocell to Google's US fiber backbone. DSL services are provided by Telcos which falsely tier their subscriber's bandwidth to increase margins. (Not much more they can do to squeeze water out of th
at rock!)
CableCos are the obvious partners for GoogleTel since they share a mutual financial and business dislike for the Telcos and have larger standard bandwidth offerings for their subscribers.
In Europe, GoogleTel has greater synergies with "open access" FTTH network owners. Their subscribers have "fiber to the bedroom", no relationship to a Telco, unlimited bandwidth and a partner model that allows GoogleTel to provide its services without conflict.
In Japan and South Korea, FTTH is the most dominant access network and costs only pennies per MB.
In Sweden (not Norway), FTTH is extremely cheap and growing rapidly.
The last mile is no longer "the last mile"...
Any guess as to the network tech Google might choose for their 700mhz buildout?
CDMA, GSM, or VOIP over WiMax, HSDPA, EVDO(rev B or C) or a version of the Qualcomm Flarion OFDM ??
did I miss another possibility?
any thoughts?
You should also ask "Why did Roam4Free meet with Google's GrandCentral?". To me it looks as if you also could add an international cell phone operator to your GoogleTel equation.
Google choice for wireless technology is very complicated, as it is for all wireless operator.
It has to do with costs, OPEX, consumer behavior, demographics, ARPU, consumer habits,churn predictions, branding, regulatory issues, topology issues, marketing opportunities, handsets, battery life, and the most important...the instantaneous unknown occurrences during your attempt to quantify all this data that makes all your work useless because its implications are so significant that it has redefined the assumptions and rules that you based your analysis on Day 1.
Ok, breathe!
Sorry about reminding you of some tough memories that you and I both have (or are still living through... :)
Hi,
it's true that Google could use the operator's DSL backhaul, but then the susbcriber has a billing relationship with the provider who is not providing the vocie service. This makes Google subject to the Operator's priorities and at the very least there will be a battle between the operators and Google. Bandwidth limiting or classifying the traffic as low priority could be one thing that the operator would do.
CableCos could be the answer then. That then means that for lower prices to be enjoyed, subscribers have to put up with the possibility of lower quality as cablecos are not liable to provide a standard voice service (to provide a standard service, they have to turn into a telco). Lower quality voice calls may work in the developing world where expectations are lower, but with ARPUs of US$5 per month there may not be much margin to make.
-Matthew
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would not surprise me at all if google accelerates the whole thing by buying an existing cell phone network in usa. most likely targets would be t-mobile or sprint. sprint would be the more interesing because of the WiMAX network already being built along with clearwire.
if they wait for the 700 mhz auction and than build there own network it may be too late to be disruptive. i give 18 months max before every cell phone in the usa is on an unlimited calling plan. to make a big bang google needs to get in while people are still counting the airtime minutes. than they get the credit as the big disrupter.
Wow you guys really know your stuff! This blog is excellent. Ok please go easy on me as I am knew to the Google telecoms thing and these figures are waaaay over my head. Please don't tear me to pieces if what I'm about to say makes no sense or is just completely off the page (like I said technically I know nothing) in the UK we are switching to digital in the next couple of years, analogue TV signals will be 'switched off'. Google has placed a bid (or will be?) to buy up masses of the analogue bandwidth. I don't really know what they could do with this, could they for example launch their own mobile phone service in the UK and wipe the market out? Or could they launch free internet? Any ideas as to what they could do with this MASS of analogue bandwidth?
You must first understand Google economics. It is based on its war chest of cash and revenue model that is based on advertising.
Telecom economics are based mostly on per-minute charging of voice services.
Google will leverage their economics within the 150 year old telecom world and disturb it as much as P2P has disturbed the movie industry. Its not about destructive technologies, its about destructive business models!
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