Recently, Google announced plans to enter the wireless (cellular telephone) business – a move which we have been talking about for some time.  In this post, the eighth in our series Telecom Tip Tuesdays we will talk about Google going wireless and what this might mean for the wireless industry.

What is an MVNO?

What does Google plan for wireless?

How will Google affect the wireless industry?

Since the initial announcement, there has been a flurry of speculation about Google’s plans for the wireless industry and how it plans to offer service.  According to Sundar Pichai, senior vice president of Android, Chrome and Apps, Google isn’t planning to disrupt the wireless market and go after Verizon and AT&T. “We don’t intend to be a carrier at scale,” Pichai said.  However, because they are so big, Google’s experiments have a tendency to upend industries whether they plan to or not.

For starters, let’s talk about what an MVNO is and how Google plans to offer service to wireless customers.  An MVNO, as we discussed in a previous post, is a Mobile Virtual Network Operator.  MVNO’s compete with established wireless operators, often by leasing access on the carriers’ networks.  Most MVNO’s are relatively small, but Google obviously brings enormous scale to the competition.

Second, let’s establish one fact.  If you are using a major carrier like Verizon or AT&T, you are probably paying way too much for your mobile service.  The average American mobile bill is over $1000 a year, which is more that cable and Internet combined.  Google is going to change that by partnering with the smaller carriers and by offering a a set of innovations which they think the other carriers should adopt.  Their intent is to demonstrate that these innovations are possible and to use their scale and market power to drive the other wireless carriers to adopt them as well.

One of the rumored innovations that Google is looking to offer is actually being offered by a few smaller MVNOs like FreedomPop.  At the moment, Google says, it hopes to provide ways for phones to more easily move between cellular networks and WiFi connections, perhaps even juggling calls between the two. By offering voice and data service over WiFi, they can significantly reduce the cost of cellular service.  Freedom Pop and others like it do much the same thing now, but with the leverage of Google’s Android mobile operating system and general internet clout, they can push things even further.

This is where Google, despite its assurances that it will not compete head-to-head with established carriers (who also sell millions of Android phones), will make big changes in the wireless landscape. In some respects, this is already happening.  We have noticed that Verizon is beginning to offer unlimited WiFi talk and text to international plan members.  We believe that this is the first step towards an adoption of WiFi by the major US carriers, and it just might result in price reductions for all wireless subscribers, especially if the Google Wireless service catches on and threatens the older carriers’ market share.

This is likely only the start for Google.  As we discussed in our previous post on Google, the next likely victim of wireless disruption is the old phone number.  If you think about it, the phone number is really a secondary piece of information in how we communicate.  The primary way we identify someone is through their email address or their social profile.  The next moonshot for Google might be to eliminate the phone number entirely ad replace it with a more meaningful identity. Google is positioned to become the first wireless carrier that can use your email address or something similar, instead of a phone number to connect with you anywhere you are.

Pin It on Pinterest

Share This