Google and the RBOCs 2010

Market Studies

Telecom Business Transformation Series

1394 Market and Technology Study

Google and the RBOCs 2010

Release: January 2010

| Features | TOC | TOF

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“Google and the RBOCs,” analyzes Google’s strategies as they relate to the telecommunications business and the interrelationship with current RBOC strategies. Our author reviews the current telecommunications marketplace and the forces driving it, and connects the RBOCs’ and Google’s public actions and announcements with their long-term strategies. An understanding of the implications of these strategies is fundamental to understanding where the telecommunications business is going in the US for equipment manufacturers, vendors, service suppliers and investors.

This report focuses on the perceived strategies of Google and the RBOCs. The RBOCs that we will focus on are Verizon and AT&T and to a lesser extent Qwest. The report will use these companies’ public announcements and private interviews and the author’s years of experience in this area to develop a view of their strategies, comments on the strategies and likely outcomes. The report will provide forecasts on all the topics of interest.

Report Features

This report contains much more than just a review of these companies’ strategies. It is full of forecasts and contains discussions of major topics in telecommunications that directly influence strategy selection such as:

  • Capital expenditures (including a Capx forecast);

  • Overbuilding and how this is being implemented differently by the different RBOCs

  • The implementation of the Advanced Access Network and how this has become a strategy in its own right

  • And perhaps most importantly how, and which of, the RBOCs are leaving wire line and becoming wireless companies.”

In addition to the detailed discussion of the competitive environment and the companies’ strategic response to that environment, this report addresses each of these areas, and provides forecasts as to our expectations for each. The report starts with a description of the planning environment and moves on to the underlying economic situation. Because of the overriding importance of the state of the US (and World) economy, it then provides a review of our forecasts for the nation’s economy as well as its impact on telephony. That portion of the report also provides our forecast for capital spending over the next five years. The report then continues with a review of the current telecom market structure. With that background, it moves to a detailed analysis of the activities of Google and the major RBOCs. From these activities and the market structure, the report develops and presents our view of each company’s strategy and comments on each. Forecasts are provided for each of the areas addressed.

Table of Contents

Table of Contents

Table of Figures

The Lightwave Network Series of Reports

The Lightwave Network

The Lightwave Series of Reports

General Reports on the Network
General Market Reports
Specific Systems Reports


The Telco Business Transformation and Next Generation Network Series of Reports

This report

Planning Environment

US Telecommunications Economic Forecast

General Economic Background

Telecom Economic Background

Telecom Forecasts
Possible Positives for Telecom in 2010

Telecommunications Capital Forecast

Telecommunications Economic Forecasts Summary

Telecommunications Economic Forecasts - 2010

The Face of Network Competition – Market Structure Today

Google as a Major Player

Google Voice

How do you compete with “Free?”

Google Voice Growth

Google Voice – Downside

Forecast for Google Voice

Google Phone

RBOCs’ Multidimensional Competitive Struggle

Post-merger Competition

RBOC Purchase of IXCs

RBOCs vs. Cable Companies

RBOCs Are Becoming Wireless Access Companies

RBOC Loss of Main Lines

It’s a Wireless Access Industry!

The Wireless Access Landscape

Forecast for Wireline to Wireless

The Super Competitors

Strategies of the Major Players

Google Strategies

  • Management and Financial Items
  • Network Items
  • Summary and Forecasat  of Google Strategies

Verizon Strategies

  • Management and Financial Items
  • Network Items
  • Summary and Forecast of Verizon Strategies

AT&T Strategies

  • Management and Financial Items
  • Network Items
  • Summary and Forecast of AT&T Strategies

Qwest Strategies

  • Management and Financial Items
  • Network Items
  • Summary and Forecast of Qwest Strategies

Comments on the Strategies of the Major Competitors

Summary of Forecasts

General Economic Forecasts

Telecommunications Economic Forecasts - 2009

Advanced Access Architectures




Wireline to Wireless

Google Voice/Google Forecast


Appendix I, Advanced Access Architecture Plans

AAA Deployment Forecast Summary

  • AT&T
  • Verizon
  • Qwest

Forecast Size of Deployments

Forecast of Homes Passed

Penetration Rates

Appendix II, Overbuild

Overbuild – How?

Overbuild - Significance

A New Type of Competition

Summary of Overbuild Forecasts

Appendix III – Vision Planning Primer

What Is Vision Planning?

Development of a Vision

Vision Planning – Examples

IBM Example

Lincoln Example from the Civil War

The Vision Planning Pyramid

The Vision Planning Process

  1. Vision statement
    • Service Vision Example

  2. Develop a view of the future environment and test.

  3. Restatement

  4. Backwards deployment
    (Implementation Plan)

Service Implementation Plan Example

Summary of Vision Planning

Table of Figures

Figure 1, Lightwave Network

Figure 2, Planning Environment

Figure 3, Telecommunication Capital Expenditures Actual and Forecast

Figure 4, Telecommunications Economic Forecasts

Figure 5, Forecast for Google Voice

Figure 6: Summary of Competitive Position, Pre-Mergers

Figure 7: Revised Competitive Structure Due to IXC Purchases

Figure 8: RBOCs Subsume IXCs and CLECs

Figure 9: RBOCs vs. Cable Companies

Figure 10, Telcos vs. Cable Companies – 2009

Figure 11, Verizon Wireline vs. Data Revenues

Figure 12, Verizon Loss of Main Lines vs. Data Revenue

Figure 13, Verizon Wireless vs. Wireline Total Revenue

Figure 14, Wireless Competition

Figure 15, Forecast for Wireline to Wireless Migration

Figure 16, The Super Competitors

Figure 17, Google as a Serious Threat

Figure 18, Google Strategies

Figure 19, Verizon Strategies

Figure 20, AT&T Strategies

Figure 21, Qwest Strategies

Figure 22: Forecast Homes Passed Cumulative — All Technologies

Figure 23: Forecast Homes Passed Annually — By Company — All Technologies

Figure 24: FTTX vs. High-speed Accesses vs. US Households

Figure 25, Verizon's NOOF Arrangement

Figure 26, Forecasted Overbuild Strategic Outcome

Figure 27, IBM’s Gerstner’s Corollaries

Figure 28, Vision Planning Pyramid

Figure 29, Vision Planning Approach

Figure 30, Traditional Planning Approach

Figure 31, Tom Peter's List of Good Vision Attributes

Figure 32, Davenports’ Visioning Process

Figure 33, Service Vision Statement Example

Figure 34, Vision Statement Examples

Figure 35, Example of Vision Statement and Implementation Plan
for Service

Figure 36, Summary of Points about Vision

Free Telecom Info

Business Transformation Planning

The Telecommunications
Market Today

Next Generation Carrier's Network - Architectures, Economics and Forecasts
Next Generation
Carrier's Network:
Planning for Business Transformation

Is Google Going to Capture Telephony?

Active Optical Cables 2009 Live Charts

Active Optical Cables
Market Report 2009

Advanced Access Architectures 2008: AT&T, Verizon and Qwest Plans and Forecasts
Advanced Access Architectures 2008: AT&T, Verizon and Qwest Plans and Forecasts
FTTP/ FTTN: The RBOCs' Advanced Access Architectures - Equipment and Fiber Requirements
Cost Analysis of RBOC’s Advanced Access Architectures: FTTP, FTTN, FTTC
Bandwidth Needs Analysis of the RBOCs' Advanced Access Architectures: FTTP and FTTN
WiMAX: The Broadband Wireless MAN
The 4G Era: 802.16e
Market and Technology Assessment