Google is making unprecedented steps into the telecom game, indicating the tech company wants to be far more than just your search engine or e-mail provider.
Mountain View, Calif.-based Google has inked deals with Sprint and T-Mobile to become a wireless carrier, according to technology website The Information citing unnamed sources. There are no details yet on what this service will look like or when it will begin. But it does mean that Google will use existing cell towers to sell wireless plans to consumers — a move that could uproot the already competitive wireless provider field. This means Google not only wants to provide customers with now nearly-ubiquitous Internet services, but control how these services reach customers.
Google already has the makings of a wireless provider in place. It created Android, the most popular mobile operating system in the world. It launched its own line of smart phones and tablets. And it is increasing Internet speeds by laying Google Fiber. Google seems well positioned to offer customers desirable hardware and wireless bundles.
The next step would be to obtain a wireless network. But instead of taking the costly and time-consuming route of building its own wireless network, Google agreed to a mobile virtual network operator agreement, or MVNO. Essentially, it is buying Sprint and T-Mobile’s excess wireless capacity. It saves Google the cost of setting up the network, and could bring an influx of customers to Sprint and T-Mobile, which are currently the third and fourth largest wireless providers in the US.
But Google can’t get its hands in something without many worrying how the tech behemoth will potentially disrupt it. Sprint reportedly added a clause that calls for a renegotiation if the service volume gets too high (in other words, if more people start choosing Google over its services). Privacy experts are concerned that this allows Google into another area of customers' lives, allowing the tech company to further trace customer behavior and later use it against customers through its bevvy of services and ads.
Google, on the other hand, may also encounter some growing pains. Being a wireless provider means it will have to deal with the burdensome administrative work that comes with billing and contracts. It hasn’t had to deal with these sort of tasks often, given most of its services are ad-supported and can be offered for free – not to mention shouldering the blame if any wireless coverage gets spotty or goes down.
So what does this mean for the incumbent telecom industry? As with any Google venture, the tech company is looking to change the way things are done. Long critical of data caps imposed by current wireless carriers, Google has been poking around legislation to find ways to expand Internet bandwidth. According to the Wall Street Journal, Google lobbied to free up a large amount of low-quality wireless spectrum that could connect people within short distances. It wouldn’t work for a nationwide network, but split across different cities it could provide extra wireless competition.
Longtime Google executive Nick Fox reportedly heads the project (codenamed “Nova”). Sources told The Information and the Wall Street Journal that he originally wanted to launch the service last fall, but now they are aiming for next fall.
Publicly, all companies reportedly involved in the deal have declined to comment. It remains to be seen how much speculation will prove true. Regardless, if Google follows through with its wireless plan, it could change the mobile industry forever.