Google has confirmed it will launch an MVNO service in the US this year, potentially straining the already complicated relationship between tech and telecoms. Speaking at the Mobile World Congress in Barcelona, Google SVP Sundar Pichai was quoted saying…
Google has confirmed it will launch an MVNO service in the US this year, potentially straining the already complicated relationship between tech and telecoms.
Speaking at the Mobile World Congress in Barcelona, Google SVP Sundar Pichai was quoted saying that the company aims to provide a “small scale” offering that would integrate hardware, software, and connectivity.
He added that Google is working with existing partners, with details to follow in the coming few months.
Pichai said the company is not looking to threaten incumbent telecoms operators, but rather to encourage them to embrace innovation and accelerate the future adoption of new technologies.
During an investors’ conference on Monday, Verizon CFO Fran Shammo said that, at this point, he is not really concerned about Google’s plans.
“One will have to see how they execute on that and see how the market responds to that and then we will act accordingly,” he pointed out.
Pichai’s announcement came amid mounting speculation that the tech giant would offer its services by using Sprint and T-Mobile US’s networks.
In January, a number of press reports suggested that the company was set to launch an MVNO in markets where it sells Google Fiber Internet service.
Google Fiber is now present in Kansas City, Austin and Provo, with other cities to follow.
The company has for some time been rumoured to be looking to expand the ultrafast services into Europe.
Professor Will Stewart from UK-based Institution of Engineering and Technology said: “Google’s proposed entry into the market as a mobile virtual network operator – and its existing efforts in fibre networks and airborne platforms – in the US could potentially be good news for the UK too.”
He argued that market dominance concerns apart, a move into the UK could speed up universal digital accessibility, not least by encouraging other providers to rise to the challenge.
In the US, a deal with Sprint and T-Mobile, respectively the third and fourth-largest players, could be beneficial.
IDC senior research analyst Brian Haven believes that, while a Google MVNO would have the potential to steal subscribers, it is unlikely to make a significant dent on Verizon’s competitive position.
Sprint and T-Mobile, which both have available spectrum, already have service-reseller deals with Google and could benefit from new revenue and subscribers, he pointed out.
“Sprint needs a shot in the arm to help it recover from the…losses it saw over the course of the last year and T-Mobile is looking to drive its Uncarrier momentum into 2015,” Haven said.
Accessing the networks would enable Google to better manage the experience on the devices it sells and supports, as well as offer a larger coverage footprint through the use of multiple carriers.
In his view, Google’s deployment of a hybrid wireless network that leverages cellular connectivity as well as fixed broadband via WiFi, the method currently used on a small scale by some MVNOs such as Republic Wireless and Scratch Wireless, could be potentially exciting.
IDC’s Haven called the idea that an MVNO could significantly challenge one of the top four “very optimistic at best.”
However, he noted, Pichai’s remarks suggest that Google has specific goals that it wants to accomplish with this project, including establishing a forum to showcase some of their new Android features.
“I think it makes sense for a company that seems to want to position themselves firmly in the mobile ecosystem. Now, in addition to providing a mobile platform, devices and content, they can provide mobile connectivity,” Haven said.
