Google said this week that while it does not aspire to become a “network operator at scale,” it does plan to share its plans regarding wireless service within the coming months. The news came at Mobile World Congress from Sundar Pichai, the executive who now oversees almost every major Google business unit except YouTube.
Google is working with carrier partners, Pichai said, but did not specify which ones. The Wall Street Journal reported earlier this year that Google is working with Sprint and T-Mobile US on deals that would see the software giant reselling the carriers’ wireless service to consumers.
Pichai did not say that Google will definitely launch a traditional mobile virtual network operator, but there is widespread expectation that this is what the company plans to do. Other companies have tried to enter wireless by reselling carriers’ services under their own brands, including Disney, ESPN, Wal-Mart and Best Buy, some more successful than others.
Unlike those ventures, Google is apparently targeting wireless service as a way to nudge the bigger players in new directions. “Our goal is to drive a set of innovations we think should arrive, but do it on a smaller scale, like Nexus devices, so people will see what we’re doing,” Pichai said. One priority that Google is likely to push will be automatic Wi-Fi offload when the cellular network becomes congested.
Wi-Fi is clearly a big part of Google’s wireless strategy, since the company does not hold significant licensed spectrum. During the past 12 to 18 months, various reports have surfaced regarding the company’s Wi-Fi plans. Google is said to be developing an Android app that will automatically move users off the cellular network and onto Google Wi-Fi when it’s available. It’s also reportedly planning public Wi-Fi hot spots in the cities that are getting Google Fiber. Google is already the Wi-Fi provider for Starbucks, having replaced AT&T in that role.
“With regard to the Google MVNO, I think Google will look to open up more opportunities with Wi-Fi and more innovative ways to leverage the Android platform,” said analyst Aaron Blazar of Atlantic-ACM. “On the voice front, I would look for them to push Wi-Fi-enabled calling with better interaction/handoffs with the cellular network. The offers in the market today have failed to make it seamless and available on a wide range of devices, so there is a lot of room to innovate. On the data network front, Google will also look to leverage Wi-Fi relationships to deepen data network coverage for a Wi-Fi-enabled device while also potentially leveraging other technologies on the data networking front.”
Of course Google could also use an MVNO to push Android devices, and it could launch a wireless service that is only available on Android. Blazar said he would expect Google to use its own wireless service to experiment with device subsidy models surrounding ads or other services driving revenue.
As for rivals, Verizon Wireless said it was in a wait-and-see mode in terms of what it expects from a Google venture.
“I think we’re just going to have to sit and wait and see what happens with that, but I’m not real concerned at this point about that,” said Verizon Communications CFO Fran Shammo, speaking at an investor conference this week. “One will have to see how they execute on that and see how the market responds to that and then we’ll act accordingly.”
Verizon has already stated that it did not plan to chase customers down the value scale, hinting that it did not make financial sense to grow its traditional connected base at all costs. The carrier instead has said it plans to tap into the growing connected devices arena that is currently the domain of machine-to-machine and the “Internet of Things” as a way to profitably grow its base.
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