Can Google spell the death for the telcos?

It would not be a surprise if in five years from now, the major cellular giants of planet earth are going head to head vs. the internet search engine giant. No contract phones, unlimited and cheap data plans, devices with interoperability between all major wireless protocols, using some platform provided by Google (device, Android OS, websites), and all point to $$ from ads to Google. VoIP with a reliable 700-800 Kbps data connection makes for a crisp voice call. With WiMax and LTE promising upwards of at least 30Mbps, quality and reliability might not be a worry. Who needs ‘airtime minutes’ again? Not me 🙂

Brief History: Google announced in the summer of 2007 that it would bid a minimum of $4.6B for the spectrum, the ‘reserve price’  set by the FCC. The four openness provisions suggested in the announcement were the first hint that Google wants the consumers to win. FCC mandated two of these provisions. Now it is clear that the Google phone (rumored as aka. Nexus One by HTC) was in plans all through the years. Google lost the bid, but got what it wanted, a provision through which the consumers can use any phone on any network.

Series of events: Android OS with T-Mobile G1, followed by GoogleVoice, and possibly an “unlocked” Google branded phone (see this WSJ report from last week). Migration towards cloud sevices, unification of identity and services even on the current smart phone devices, and the value add of the traditional voice networks starts to decrease.

We are on course for internet to swallow the ‘legacy’ phone system.

This brings me to Newtons third law, only my application is for a Porter+Drucker+Newton perspective. The competitive advantage of the larger cellcos (or telcos), which is very capital-intensive and infrastructure driven (very successful Verizon’s “theres a map for that” ad campaign is a proof), is being eaten up by the cloud movement. How will the cellular giants evolve and adapt? Who will they ‘partner’ with? Where is the third leg of competition coming from?

Your thoughts …

UQ

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3 responses to “Can Google spell the death for the telcos?

  1. Google is smart but I dont think it can compete with the telecos… The telecos cant see their billions invested in infrastructure going to waste by some smart internet search engine. There are always telecom regulators.
    Just an example, VoIP is illegal in Kuwait.

  2. I see what you are saying Waqas, but, Kuwait is a very small market and not a representative example. US is by far the biggest market in terms of ARPU and operator revenues. I think there is a consensus that VoIP invasion is inevitable. The question is how will the telecos adapt?

  3. Pingback: Tweets that mention Can Google spell the death for the telcos? « UQ's blog -- Topsy.com

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