Google

How Google could end up as your next wireless carrier

Google might be adding "wireless carrier" to its list of business ventures. Here's what the move might mean for the company and how Google could pull it off.

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Google could soon be offering wireless service to customers.
Image: James Martin/CNET

If you glance at the top of your smartphone screen, you're likely to see one of the major wireless carriers listed as your provider such as AT&T, Verizon, T-Mobile, or Sprint. But soon, you could see Google take that spot on some devices.

According to a report by The Information, Google is planning to offer wireless service plans in the near future as a mobile virtual network operator (MVNO).

Although it's speculation at this point, the service would partner Google with Sprint and T-Mobile, with Google purchasing wholesale access to each of the existing carriers' networks. Google would likely sell wireless plans and manage users' calls and mobile data usage.

According to Gartner's Bill Menezes, this won't happen like Google Fiber, where Google could go neighborhood to neighborhood. For this type of service, they need scale to start with, which is why Google would buy access through one or more of the existing cellular carriers.

In buying access, you don't have to manage the wireless spectrum or manage the network access portion, you're merely managing the purchase of access through the carrier.

"You're managing the relationship with your customers, which is sales, billing, support, and all the back-office systems that go into that and boom — you're basically providing the same product but you're using somebody else's network to do so," Menezes said.

Being that this is still rumor, Menezes said that another option would be for Google to lease the spectrum from the carriers, as those types of relationships happen all over the world. This is especially true for smaller, local cellular operations as it gives them resources like LTE access in exchange for a roaming relationship with the bigger providers.

If Google does end up buying wholesale, they could potentially repackage the service however they want, or bundle it with other services. Sprint and T-Mobile would probably place, at least, some restrictions on price or plan structure, but there are a lot of things that Google could do that Sprint or T-Mobile aren't already doing, Menezes said.

One option, he pointed out, was the possibility of pay-as-you-go with a competitive rate for the enterprise — something Menezes said is routinely brought up in conversations he has about wireless service. Currently, most options are prepaid, with no way to account for unused service.

Understanding how the agreement would work is only half of the equation, though. We still need to understand the motives behind a business move like this. Forrester's J.P. Gownder said that is it ultimately about two things: Data and the mobile experience.

"They can track so much data about people via cookies on the web, but the Internet is now mobile-dominant," Gownder said. "In order to gain full data on how, where, when, and ultimately why people do what they do, they need wireless operator-level data."

Gownder noted that Google also has the opportunity to innovate on the mobile experience as well. As an example he mentioned rumors that have been floating around about Google selling phones that would be switchable between carrier networks, allowing users to search for the best signal available.

The rumored partnership with Sprint and T-Mobile could also create an opportunity for Google to better build out its mobile payments business.

"If Google is serious about mobile wallets and payments, they might find the route through operators, who already control a billing relationship with customers," Gownder said. "Apple (iTunes) and Amazon (eCommerce) already have billing relationships, but Google doesn't."

As with many of Google's forays into new territory, a go at wireless could very well just be another routing strategy to point people back to Google's core products and services, Menezes said.

When it comes to the potential partners, the choice of Sprint and T-Mobile choice makes sense. AT&T and Verizon are bigger players with different approaches to wholesale.

Sprint and T-Mobile have excess capacity, but similar technology to the big two, Menezes said. They are the number 3 and 4 providers in the US cellular market, so partnering with Google makes sense in the long run for both Sprint and T-Mobile as well, as it could end up making them more competitive.

When asked about what this partnership could catalyze between Sprint and T-Mobile, Menezes said that a merger between the two has been ruled out under the current administration, but that doesn't mean there won't be changes in leadership in the future.

The bigger opportunity, he said, is a potential "try before you buy" situation, where Google gets up close and personal with the networks before deciding if it makes sense for them to take a stab at majority ownership, partnering with Softbank for a stake in Sprint or Deutsche Telekom for partial ownership of T-Mobile.

"These types of relationships between companies of this size naturally leads one to believe that it's not just about buying the service, in the long run it could be something different," Menezes said.

What do you think?

We want to know. Would you buy wireless service from Google? Do you think they can pull it off?

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About Conner Forrest

Conner Forrest is a Senior Editor for TechRepublic. He covers enterprise technology and is interested in the convergence of tech and culture.

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