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Google Fiber: Sparking a renaissance in fixed access Technology Business Research (TBR) Webinar Series
Aug. 12, 2014
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Chris Antlitz Telecom Senior Analyst
Email: [email protected]
Twitter: @chrisNMP
Phone: 603.758.1850
Webinar Presenter
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What is Google Fiber?
Source: Google Source: theweek.com
Source: wired.com
Source: chrome.com
Source: airbnb.com Source: Google Source: Google
Google Fiber is an initiative at Google centered on providing Fiber to the Premises (FTTP) internet service to the masses at affordable rates
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Though Google’s network footprint is small, it is disrupting the status quo in the fixed access business and is pushing incumbent operators to respond by investing in their own networks. This is touching off a renaissance in fiber access deployment across the U.S. We are in the very early innings of this playing out…
Where is Google Fiber deployed?
If Google deployed fiber to all 12 metros it is currently targeting, it would only cover 3% of U.S. population, but this is all it takes for the reaction
Source: Google
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Google is not in the “traditional” ISP business, it is using better access to indirectly grow its lucrative, high-margin online advertising business
Why is Google in the fiber business? What’s the point? • Faster internet = more ad dollars
• Google also able to build customer loyalty from value offerings How is Google able to provide a better offering than incumbent ISPs? • “Win the people, win the city” model
• Concession based approach to deployment NOTE: Google is likely operating access business on breakeven basis.
What is Google Fiber’s strategy and business model?
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Imagine getting up to 100 times the internet speed and a full suite of HD TV channels for a fraction of the cost of incumbent offerings
Why is Google Fiber Disruptive?
Google Fiber service offerings and prices
Source: adweek.com
Source: Google
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How are/will incumbent ISPs respond?
Incumbent ISPs need to increase value substantially in order to retain subscribers; there are two paths to take
Operators can
follow two paths:
Differentiate what
comes through the
pipe.
Compete on width
of pipe.
End result /
Implications Options to increase
value
Losing strategy long-term. Speeding
up own service and eating the cost is
not sustainable. Many ISPs will
stumble and or go bankrupt. Strategy
incurs huge capex costs and leads to
margin compression.
Viable strategy long-term. Service
differentiation enables incumbents
to provide value in ways other than
purely speed.
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Difference between winners and losers is who can provide the most value through the pipe, not the fastest speeds; the big guys get this and are already on the move
Examples of what some ISPs are doing to differentiate their services
AT&T
• Ubiquitous
multiscreen video
(DirecTV play)
• Solutions tailored
for enterprise
Verizon Comcast
• Ubiquitous
multiscreen video
(LTE Broadcast and
Intel Media play)
• Solutions tailored
for enterprise
• Leverage content
properties
• Free Wi-Fi from
CableWiFi Alliance
Differentiation
Strategy
Challenges
• Lots of legacy – will
need to maintain high
capex despite
differentiation strategy
• Not content owner
Not content owner Limited migration
options from DOCSIS
3.0
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Incumbents will have to respond to Google Fiber and provide better internet service
What will the U.S. broadband market look like in five years?
The future is substantially more fiber in U.S. networks
More fiber will be deployed across the U.S. and it will be closer to the end-point
Google Fiber has become more than just a network, it has become a movement and model for the future of internet access. It is no longer just viewed as a lab experiment; it is touching off a renaissance in fixed access across the U.S., one that will reshape the broadband footprint in the U.S. in coming years.
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Google grows its lucrative
online advertising business
indirectly from its end-users
having faster internet speeds.
Consumers, not just those
subscribing to Google Fiber,
get faster internet speeds at
lower cost.
Telecom vendors benefit from
resurgent spend on
infrastructure as Google and
incumbent ISP operators invest
in fiber.
U.S. economy stands to
benefit because faster
internet speeds means
better productivity and
quality of life. It also
means more jobs.
Implications for telecom sector and U.S. economy
The impending fixed broadband arms race stands to benefit not only Google, but the entire U.S. economy
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Google Fiber is really part of a much broader initiative at Google, which is to provide universal, low-cost, high speed access to the internet
What else is Google trying to do; what is the “Master Plan”?
Source: guardianlv.com
Source: broadbandworldforum.com
Project Loon Other Ideas
Source: dailymail.co.uk
Source: newstalkzb.co.nz
Source: businessinsider.com
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Chris Antlitz
Telecom Senior Analyst
@chrisNMP
Phone: 603.758.1850
Google Fiber: Sparking a renaissance in fixed access
James McIlroy Vice President of Sales Email: [email protected] Telephone: 603.929.1166
Twitter: @TBRinc SlideShare: www.slideshare.net/TBR_Market_Insight YouTube: www.youtube.com/user/TBRIChannel
Questions?
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TBR’s Networking and Mobility Practice covers telecom operators and network vendors on a global basis
NMP Overview
Networking and Mobility Practice Portfolio
Operator Research
Telecom Operator
Enterprise Operator
Vendor Research
Telecom Vendor
Services (TIS)
Benchmark Addressable Market Forecast (AMF)
Margin Benchmark
Equipment Software
Enterprise Networking
Services (NIS)
Equipment and Software
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NMP Syndicated Research Coverage
Telecom Vendors Operators Benchmarks
• Alcatel-Lucent • Cisco Systems • Ericsson • HP Telecom & Mobility • Huawei • IBM Telecom & Mobility • Juniper Networks • Nokia Networks • Samsung Telecommunication
Systems • ZTE
• AT&T • Sprint • T-Mobile USA • Verizon Enterprise Coverage: • AT&T Business Solutions • BT Global Services • Orange Business Services • Verizon Enterprise Solutions • Vodafone Enterprise Services
• Telecom Vendor Benchmark
o Telecom Infrastructure Services (TIS)
Telecom Infrastructure Services Benchmark
Telecom Infrastructure Services Margin Benchmark
Telecom Infrastructure Services Addressable Market Forecast
Telecom Infrastructure Services North America Addressable Market Forecast
• Enterprise Network Vendor Benchmark
o Enterprise Networking Addressable Market Forecast
o Network Infrastructure Services (NIS) Benchmark
• U.S. and Canada Mobile Operator Benchmark
Enterprise Networking Cable Providers
(Reports include content on Ent. Networking)
• Accenture Telecom & Mobility • Cisco Systems • HP Telecom & Mobility • Huawei • IBM Telecom & Mobility • Juniper Networks
• Comcast • Time Warner Cable
Internet Companies
• Google • Microsoft Telecom & Internet
TBR Networking and Mobility Practice Syndicated Coverage
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