Reports suggest Google MVNO launch could happen this year
Numerous sources are reporting that Internet search giant Google is looking to enter the domestic mobile telecom space as a mobile virtual network operator partnering with either Sprint or T-Mobile US.
While details remain sparse, a report from The Information suggests Google could be looking to offer voice and data services, while The Wall Street Journal added that Google planned to partner with either or both established operators to resell services under the Google brand and planned to undercut price points currently offered by mobile operators, which themselves have been slashing prices over the past year. Reports suggested that in 2013, Google was in talks with Sprint about a potential MVNO partnership, but that Sprint backed away due to competitive concerns.
Those competitive concerns appear to have diminished, as analysts noted the positive attributes of a Google MVNO. Macquarie Securities analyst Kevin Smithen noted that Google could contribute as much as $1 billion per year in earnings before interest, taxes, depreciation and amortization to an operator by as early as 2018. That financial incentive could be a tempting offer for Sprint, which is still looking to gather funds to support the build-out of its extensive 2.5 GHz spectrum holdings, and for T-Mobile US, which is looking to shore up the financial angle of its aggressive customer growth initiatives.
Google was an investor in Clearwire’s initial push to launch mobile broadband services using the 2.5 GHz spectrum licenses that Sprint eventually (re-)acquired when it purchased Clearwire in mid-2013. Google eventually sold off its stake in Clearwire, along with most of the initial investors.
Google also caused a stir when it purchased and later sold Motorola’s device business, which was seen as a way for Google to further expand its Android mobile operating system.
However, that move was seen as causing consternation across the device landscape as manufacturers felt they were competing directly against Google in offering Android-based devices. Such feelings could also impact a move into the service provider space as mobile operators rely on Android-based devices to offset Apple’s influence with its popular iPhone lineup.
Google has flirted with the mobile operator model, having been at least an initial participant in the Federal Communications Commissions 700 MHz spectrum auction, as well as very vocal in regulatory issues surrounding the use of unlicensed spectrum. Most recently, Google filed comments with the FCC regarding the use of higher-band spectrum to potentially support its balloon-based Loon service.
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