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Google chooses to bid for US 700Mhz spectrum and takes aim at Telcos.

December 2, 2007

The rumours about Google sniffing around buying licences in the upcoming 700Mhz spectrum (698-806 MHz band inclusive) auctions in the US are now fact with Google officially stating their intention to participate.

This is either an investment in yet another new bold initiative by the online software giant, or a brilliant ploy to get their competitors to tie themselves up in technologies that Google deems a distraction. The fact that they are pre-announcing their involvement is interesting as it is barbed response to the market. Either driving the point home that they are playing so don’t bother competing against them, or a feint attack to the industry to be distracting and disruptive.

If Google’s foray into wireless is a serious bid, then carriers everywhere need to sit up and learn fast about why an upstart Internet company like Google is extending it’s reach into their traditional Telco territories. One only has to match up some other recent announcements from Google regarding their mobile device operating system to see an interesting trend here…

The spectrum being auctioned is old analogue TV spectrum and the FCC’s wireless website states that the 700Mhz spectrum may be used for…

The 700 MHz Band licenses may be used for flexible fixed, mobile, and broadcast uses, including fixed and mobile wireless commercial services (including FDD- and TDD-based services); fixed and mobile wireless uses for private, internal radio needs; and mobile and other digital new broadcast operations. These uses may include two-way interactive, cellular, and mobile television broadcasting services.

Whilst many would argue that bidding for licences and building the infrastructure of a national carrier are 2 completely different nuts to crack, Google does have one thing that can make it all possible…… liquid green assets…. and lots of it. Google’s cash reserves mean that they can bid and bid alone if necessary. They will be able to smash their way into voice and data infrastructures like the Allies smashed the German’s grip on France with Battle of Bulge style tactics (ok that may be a bit dramatic, but one does love the visualisation).

Telco 3.0 is about a service platform, not voice and data revenues. When large online services companies like Google starts to play ball this way, carriers must adopt a partnership strategy to create a Telco As A Service (TaaS) model to prevent themselves being marginalised in the long term. We should see this change in our own markets as possible announcements form carriers come out about partnering with traditional Internet and IT companies (that’s if they wake up of course)

There may still be some issues of Government regulation around US Monopoly laws that Google could face in the future as they become larger and more eclectic in their service offering for the US market, but as the Internet knows no boundaries, Google’s play is global and there is a much bigger market outside the US than in it.

Posted By Shane Williamson

 

Info:

FCC 700Mhz auction site

Google’s official PR

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