Where are the opportunities in a market in which the capital to build new networks has dried up, yet in which rich media and next-generation technologies — as well as a desire to expand both geographically and from a service portfolio perspective — continue to up demand for bandwidth and better performance?
The answer, increasingly, is wholesale.
Facilities-based service providers are in a plumb position to leverage their existing networks to offer wholesale services to competitors and peers — whether we’re talking the Googles of the world or more traditional communications service providers — in light of this economic climate.
“I think there’s an opportunity for people that have large networks to sell or lease these networks to other providers as their infrastructure,” said Luc Ceuppens, senior director, head of product marketing for the High-End Systems Business unit at Juniper Networks (JNPR), and a standing xchange blogger.
Many sources in recent months have told xchange that Google Inc. (GOOG) is showing a new spirit of cooperation in discussing with telcos the opportunities for offering the search giant better performance for its content — on a non-exclusive basis and for a fee, of course.
Meanwhile, CMO Keao Caindec of Reliance Globalcom, a company out of India whose network spans the globe, has told xchange it is seeing a significant uptick in leasing from other carriers, especially in the Americas.
At the same time, broader band wireless via 3G and 4G builds are expected to result in some new opportunities for fixed wholesalers whose networks can be used for wireless backhaul.
Getting Google-y Eyed
For years, press and other pundits warned us that Google was planting seeds to grow its hold in physical networking and if these seeds sprouted it would blow the lid off the telcos’ walled gardens and make Google’s world domination complete.
But, apart from Google’s own data centers and a limited municipal Wi-Fi project, the company never made much of a mark in terms of network transport infrastructure.
Meanwhile, the telcos — motivated by a need to monetize their Internet infrastructure and watching Apple’s success with the AppStore — began to embrace the idea of opening their networks to third-party application developers. So, it seems, all the pieces have fallen into place for Google and the telcos to form a beautiful friendship.
In a December interview with xchange, Alcatel-Lucent CMO Tim Krause framed the value proposition for telcos in the Web 2.0 world and relative to over-the-top providers, including Google, with the construct of new ecosystems, which he said ALU is prepared to help the telcos create. Within those ecosystems of network operators and content providers, he said, telcos would be the trusted source of quality connectivity, as well as billing to end users, settlements among third-party application providers, and more.
