There is no doubt that the Google fibre rollout in Kansas City has been a success. Take-up rates are as high as 75%. However, when it was first announced in 2010, we stated that the real reason behind Google’s entry into this market was to prove that FttH can be cost-effective and can generate a profitable return—in the hope that the sluggish telcos would become more active in the rollout of FttH networks. Yet, Google is proving that this indeed can be done, the telcos remain sluggish in deploying FttH.

So it could be concluded that Google’s original goal has so far not been reached. In general terms, in most western markets telcos have been slow rolling out FttH. The exceptions are those in Asia, where governments are actively supporting the FttH rollout. China is currently leading the world in the rollout of these high-speed networks.

The key reason for telcos’ reluctance to do so is that their business model is not geared towards the business outcomes of these networks. The real value of these new networks is what can be done over them, the so-called OTT services. At the same time, this is what is behind Google’s push—it relies on these fast networks for their current services, and for the ones that are in the pipeline.

As reported from the Mobile World Congress (MWC) in Barcelona, there is a real clash between the business models. With M2M and IoT (non-industrial applications) the mobile operators are being forced to move into wholesale arrangements.

In the USA the situation surrounding FttH networks is becoming more complex due to the issue of net neutrality (NN). This stops the telcos discriminating against certain content providers through access prices and conditions. The Europeans have come up with a better NN arrangement, where there is room for what is called ‘managed services’. But by far the best solution is structural separation, ending the vertically-integrated business models used by most of the incumbent telcos.

So Google must be somewhat disappointed that its move into the FttH arena has not stimulated more competition from the incumbents, and subsequently it has announced another 34 markets that it will move into with its fibre networks, putting more pressure on the incumbents.

However, Google will never be able to make a big enough change on its own; it still depends on the networks of the telco industry and the need for the telcos to lift their game and also move forward with fibre networks.

This dependence on the fixed operators is a key reason we believe that Google has announced its move into the mobile market—with 5 billion phones and tablets already connected this is significantly larger than the fixed telecoms network market. As mentioned, this market is ideally suited for the M2M and IoT developments.

As reported from Barcelona, many very interesting developments are already happening in this area and, due to its infrastructure and with clever apps, Google has the potential to use the higher level of competition that exists in the mobile market. This will no doubt then be linked to the rapidly expanding number of WiFi networks, and the LTE and the upcoming 5G technologies are going to make that integration even more powerful. By following this model they can potentially move much more quickly with their services, as they will be using existing infrastructure rather than building new infrastructure, which obviously takes a great deal more time. These developments will be as disruptive as Uber and AirBB, utilising the sharing economy model that becomes possible within the OTT market (‘sharing’ as in new commercial opportunities).

Also add to this the company’s investments in submarine cables and its internet balloons in its Loon Project and we can start seeing the emergence of a virtual global network.

Looking at some of the developments on display at the MWC, we see that sectors, industries and businesses are changing their business models from delivering a physical product to one that will be offered as a service. Apple’s iTunes became an overnight success when it offered music-as-a-service. The same can be done with cars, fridges, toothbrushes—the list is endless. It is all about user experience, linked to new business models. I predict that these are the kind of ‘industry-as-a-service’ models that Google will start to experiment with.

With the powerful position it already occupies, and with the potential for an even stronger role in the mobile market, the hope is that Google will provide openness and will ensure that in the end its users stay in control. The company started with the motto ‘Don’t be evil’ and it is hoped that it will abide by this. If it doesn’t provide users with control there will be an endless procession of regulatory interventions, which no doubt will be led by the Europeans.