Fear-stricken telcos must learn to exploit Google

MELBOURNE, AUSTRALIA: Google is causing “fear and paranoia” in the telecoms industry and telcos must learn to exploit the search and technology giant rather than be exploited, Ovum has warned.

A new report by the independent technology analyst states that Google poses a greater long-term threat to telecommunications firms and the broader telecoms ecosystem than any other company of its kind.

Ovum principal analyst Tony Cripps said: “Google’s ability and willingness to invest in whatever is necessary to achieve its aims – to place advertising in front of as many people as possible, wherever and whenever it can – is placing a growing strain on traditional telecoms industry players’ ability to roll out novel and profitable services to their subscriber bases. By targeting users of connected devices other than PCs, Google is also competing with telecoms players for the attention and loyalty of subscribers.”

To date, this has been a particular problem for mobile telecoms operators, but the same phenomenon also looks set to impact those whose primary point of customer contact is their living room – namely IPTV, cable, satellite, and other broadcasters. Google can be expected to make similar moves aimed at making its existing portfolio of web applications and content ubiquitous on TVs and other screens used to watch video.

“Google’s ability to leverage its cloud services core to infiltrate new screens marks it out as a competitive threat to even the most converged of today’s service providers, including Verizon in the US and Orange/France Telecom in France,” added Cripps.

In its report, Ovum has drawn up a series of recommendations for telecoms industry players, including thinking like a developer instead of platform, investing in core assets and looking for ways to complement Google.

Ovum believes telcos that are intent on playing Google at its own game must do it properly, with sufficient investment and commitment in systems, software and community-building (both in terms of users, and content and application partners), in order to give their offerings a competitive chance.