Verizon and AT&T have been competing against each other in the regulated and unregulated markets for decades, in all areas of the business, including wireless, wireline, metro, data, voice, IP, data center, and so on. It’s co-petition at its finest, and they’re happy coexisting with each other, regardless of their rivalry, because they’re still making billions in profit every year. Competitively speaking, when AT&T and Verizon stare at each other, its like looking in the mirror, where each one can easily predict what the other one plans on doing next, since they’ve been swapping headcount for decades. In hindsight, no one, including Zayo, Frontier, T-Mobile, Sprint, or Windstream have ever posed a serious threat to this dynamic-duo.
However, times have changed, and a new gang of Internet Giants has emerged, and they have taken it upon themselves to disrupt the global telecommunications industry once and for all. Google, Facebook, Microsoft, and Amazon have invested billions in middle mile infrastructure. These Internet Giants have the economic muscle and tech savvy to outspend and out-innovate Verizon and AT&T. Google is leading the charge, and Facebook, Microsoft and Amazon are closely behind. Google is making the most waves, and their investing in a multitude of transports, including dark fiber, underwater connectivity, spectrum, wireless, Wi-Fi, and so on. Google, Facebook and Amazon operate in a world where everything they do is unconventional, bringing a whole new dynamic to the competitive landscape. It doesn’t take a rocket scientist to figure this one out, but if AT&T and Verizon want to compete effectively against the Internet Giants, it will have to become more like them.
Internet Giants Infrastructure Investments
- Google has been investing in dark fiber for the last decade
- Google, as part of a consortium, invest in a submarine cable system linking 7 countries in APAC with initial capacity of 28Tbps
- Google, as part of a consortium, invested in underwater fiber-optic cable linking the US with Japan
- “Google spent more on Lobbying than Comcast in 2014″ outspending Verizon, Time Warner Cable, Microsoft and Facebook
- Google has more than 100,000 fiber route miles according to one source
- Microsoft is working on spectrum and white space, as per Peter Lee, Head of Microsoft Research
- Facebook is serving traffic on previously unused dark fiber in Europe and has invested in a 6,200 underwater cable system across the Pacific Ocean
- Google’s 2014 capital expenditures: $10.9 billion
