Researching Google's attempt to buy into wireless via the 700 MHz Spectrum Auction.
1. Why did Google make this move? What do they hope to accomplish?
A: In the year 2008, Federal Communication Commission (FCC) auctioned 700 MHz spectrum. This spectrum was being vacated as TV broadcasters moved from analog to digital communications. Factors that influenced Googles participation in spectrum auction and what did they hope to accomplish are exaplined below.
First of all, Google want to enter into Wireless to capture the profits and revenues of the wireless networking market. This move allows Google to create new products and competencies in wireless network environment and become competitor to market giants like AT&T, Verizon Wireless market is ruled by four top multibilioneire companies like AT&T,Verizon, Sprint and T-Mobile.Their operating revenues and market capital will pove that wireless networking is very profitable.
Charts were Prepared by Spandana.
• This 700 MHz spectrum propagates further and propagates signals better, allowing operators to cover more area with less equipment.This spectrum will offer more advantages to wireless networking.
• The FCC auctioned total 1099 wireless licenses in the 700 MHz spectrum, but the most attractive spectrum to all bidders was the C block of 12 regional licenses which may be combined to create a 50 state nationwide network.For ny wireless company to have this nationwide network will be more profitable than others.
• As FCC accepted, the Googles idea of “Open access” with wireless networking and one of Google’s top policy priorities is spurring the availability and uptake of affordable, open broadband Internet service, it will be accomplished by open acess. This creats more customers...
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...le’s Youtube application and Android software to be used in any type of device and network with no restriction of speed, which was currently restricted by the operator’s current ifrastructure. This provides the opportunity for Google to introduce new technical innovations and produce new products to improve its existing comptenciesmore strategically.
TCO F- Deployment strategy that will facilitate the success of a technologically driven organization: Google’s strategy to force the FCC to accept Open access wireless networks provides a successful technology deployment strategy. If google didn’t win the auction, still this open access allows more broadband networks to all devices and rural areas,Which will incase its installed base for using ts applications like Youtube and Android software. This change will help google in capturing high market share and revenues.
Verizon Wireless is a joint venture between Verizon Communications out of New Jersey and the European-owned telecommunications company "Vodafone." Verizon Wireless is a wireless communication carrier that operates in the continental United States. Currently, Verizon Wireless provides wireless communication services to over 60 million customers nationwide including customers in Hawaii and Alaska. Its products include wireless voice and data services using the largest wireless voice and data network in the United States. Cingular Wireless is currently the leading cellular carrier when it comes to amount of customers on its wireless network. However, as Verizon Wireless continues to grow its market share as the United States' second largest wireless carrier, it ranks number one in total revenue collected as well as how it is viewed by Wall Street. Verizon Wireless' strong market position, perception of quality, and its proportion of income has a strong competitive advantage that would allow a small price increase--making the demand inelastic, "quality demand stretches very little in response to price change" (McConnell et. al, 2004).
This is one of AT&T’s strengths because they are able to target a wide range of segments. They have a variety of different products and services that can be tailored to each segment’s usage demand that sets them apart from their competitors. This is an opportunity for the company because they are providing lower costs to customers for their voice and data services by with the bandwidth. It gives the company growth opportunities due to the fact that they are covering both locations as well as mobile devices. The company has started to take measures to grab the opportunity by merging wireline customers with their 21-state serviced IP areas.
Verizon offers a variety of services and products for its customers including: 100% 4G LTE wireless networks, largest portfolio of wireless devices and smartphones in the market, high speed broadband internet, television and interactive devices, and enterprise solutions information technology. The existence and size of Verizon’s current infrastructure as it relates to its retail locations, wireless coverage area, and its global ip network are above peer in comparison with its primary competitors. The global ip network itself spans over 150 countries and more than 2,700 cities. Meanwhile, Verizon is also the U.S. largest wireless provider and has more 4G LTE wireless coverage than all other networks combined.
In its 2014 Annual Report, management described the thought process it uses in developing its apps and services saying, “What if we could develop a smarter email service with plenty of storage? That’s Gmail. What if we could make a simpler, speedier, safer browser? That’s Chrome. What if we could provide easy access to movies, books, music and apps, no matter which device you’re on? That’s Google Play”
Geographic Coverage- AT&T is positioning itself to be the leader in wireless coverage, identified by the move in the Global markets.
Facts: The FCC worries about the relationship of broadband and edge providers. That fear, being end-user providers will not be able to access edge providers as a whole. It might also reduce the quality of their end-user subscriber’s contact to certain edge providers. It may also reduce the earnings of favoring their own competing content or services, or to enable them or collect fees from edge providers. Since the advent of the Internet, the Federal Communications Commission (FCC) has confronted the questions of whether and how it should regulate
· the cellular phone companies are already making a LOT of money in developing and
AT&T had developed a reputation for providing high-quality long distance telephone services. It moved rapidly to exploit this reputation in the newly competitive long distance market by aggressively marketing its services against MCI, Sprint, and other carriers. Also, AT&T had traditional strengths in research and development with its Bell Labs subsidiary. To exploit these strengths in its new global competitive context, AT&T shifted Bell Labs' mission from basic research to applied research, and then leveraged those skills by forming numerous joint ventures, acquiring NCR, and other actions. Through this process, AT&T has been able to use some of its historically important capabilities to try to position itself as a major actor in the global telecommunications and computing industry.
Google is also well situated financially amongst the most profitable companies in the world with earnings nearly $50 billion and $11 billion profits. The company also boast of $48 billion in cash and just $7 billion of debt which makes them difficult to compete
Spectrum has an abundance of practical applications. It can be used for Radio communications, medical x–ray technology, microwave ovens, Bluetooth, Wi-Fi, and mobile broadband. The prevalence of these applications is continually growing, and this being the case, we must be careful to prevent interference caused by overloading a frequency and we must prepare for the ensuing spectrum crunch. The spectrum crunch refers to the point at which the amount of data being transferred through the electromagnetic spectrum exceeds the spectrum’s capacity to transfer that data without interference. This policy paper is primarily focused on the current policy surrounding the Wi-Fi and mobile broadband applications of spectrum and how the United States government should be directing policy to postpone the spectrum crunch.
Scope of competitive rivalry: primarily major carriers (revenue more than $1 billion). Legacy carriers developing low-cost offshoots
This decision stems from the Telecommunications act of 1996 which gives the Federal Communications Commission the ability define standard leasing rates with almost infinite flexibility. However, Verizon successfully argued that the Federal Communications Commission isn't authorized require a state utility commission to set rates by local exchange carriers for lease of network elements to competitive local exchange carriers. Essentially, three main issues were focused on: the pricing rules for unbundled network elements; whether excluding past costs constitutes a governmental taking; and thirdly what are the rules for combining network elements.
Manufacturers and service providers of cell phones are located throughout the world, although, as inCode, a wireless business and technology consulting firm, suggests, “Not many wireless carriers today have a truly global presence.” However, the company predicts that “the top 10 wireless carriers are going to make a push for globalization in the coming years” (“InCode releases…”). Most especially, inCode foresees service providers reaching to “unconquered markets like China, which is the fastest growing wireless market in the world” (“InCode releases…”). Some companies have already tapped into the global marketplace, spreading areas of coverage across continents. The cell phone manufacturer Nokia, for example, is rooted in Finland, but sells cellular phone products virtually everywhere on the globe. Service providers, although most often more less expansive in scope, are also trying to provide more global coverage.
Google Inc. is a company that started in 2002 and has gradually grown to become an international technology company. Google’s business is mainly focused around vital areas, like advertising, search, operating systems and platforms, hardware products and enterprise. The company produces its revenue mainly by distributing online advertising. Google also produces revenue from Motorola through selling products. The company offers its services and products in over 100 languages and in over 50 regions, territories and countries.
Boiling Google's strategy down to just one thing is impossible, but Internet marketers (and search marketers in particular) ought to be thinking about where Google wants to take the industry, because even if Google ultimately can't go where it wants, the industry will be changed regardless. Watching Google helps us understand not only where Google is going, but where others might go also. So, what is behind all the actions we've seen Google take over the years?