Telcos ready for 700 Mhz fight
Google CEO Eric Schmidt has not confirmed that the Internet colossus will bid for 700 MHz spectrum. He only indicated, in response to a question from a T-Mobile official, in front of an audience that included several journalists, that either Google "probably" would bid, or that bidding would "probably" be the answer to the question of whether it would bid or not.
Still, the indication of some forward movement--probably, that is--has many industry watchers suggesting telcos are now shaking in their shoes at the prospect of being out-bid by Google, or at least should be shaking in their shoes. Much is being made of Google's mega billions of dollars and stratospheric stock price, and its apparent progress in developing some type of "Google phone."
But, if anything, Google now seems both unsure and not terribly excited about the 700 MHz spectrum auction, and in the months that January event, Google may be the one getting the yips.
Why? Telcos (and I don't mean cellular carriers; I mean the massive corporations that own most of them and offer, in addition to wireless, a lot of wireline services) are old hands at controlling the pace, direction and outcome of spectrum auctions. They also have a lot of cash and cash flow themselves, by the way. Their wealth is not primarily based on the fickle winds of the stock market and a series of mostly unproven business models for generating more revenue from content and Web 2.0 applications, as is Google's.
Though the traditional telco business is changing, telcos have every right to be confident in their evolving business models. Also, they have more experience with wireless and broadband networking, and with technology innovation and timing. Google has less experience with all of the above than we care to remember, and it's already watched other multimedia juggernauts fail to take over telecom (e.g., mobile ESPN).
Google is indeed a juggernaut to top them all, and it may eventually own everything, right up to the future access to the words in this column. Still, I don't think its victory at 700 MHz is certain, or that it's certain Google even will bid on the spectrum. Google may come out of the 700 MHz auction a winner, but if it does, that victory will come just after a bloody, costly fight with traditional telcos, and just ahead of a competitive fight the likes of which Google hasn't yet faced.
For more about the 700 MHz battle, check out our Fierce coverage at FierceWireless.