According to various sources, who cite people familiar with the matter, Google may be preparing to sell mobile phone plans directly to customers and thus compete, in the not too distant future, with traditional mobile phone operators. To do this, I would count with the help of two of the largest carriers in the US: Sprint and T-Mobile.
The arrival of Google Wireless could, according to The Wall Street Journal, favor customers, promoting:
- A reduction in prices.
- An increase in connection speeds.
- Greater flexibility in permanent contracts.
Google and mobile telephony
Over the years, the company has put together almost all the pieces needed to become a mobile service provider:
- You have created the mobile operating system (Android) most used on the planet.
- Design and sell mobiles online.
- It has become an Internet service provider in the US with its initiative Google Fiber.
- And it even has its own VoIP phone service, called Google Voice, which allows us to obtain a phone number from Google and call other people over Wi-Fi from Gmail or Hangouts.
The only thing the US lacks is the cell towers needed to build a nationwide network., something that would require a huge investment of money and time.
However, instead of spending billions of dollars to create your own wireless network, everything indicates that Google would be negotiating with the US telephone operators Sprint and T-Mobile to offer the service through their networks.
Google would pay operators just $ 2 per gigabyte, according to forecasts by Macquarie Securities analyst Kevin Smithen, published by CNN Money. This would allow it to offer a service with high speeds at a very cheap price and revolutionize the market.
Why would Sprint and T-Mobile have decided to help Google?
The mobile phone market in the US is an extremely competitive market, which is immersed in an ongoing price war and carriers Sprint and T-Mobile are the third and fourth largest, respectively, behind the two big companies in the sector: Verizon and AT&T. There is no doubt that Google's entry into a market like this could be highly disruptive, hence the smaller companies have decided to collaborate with the Internet giant, in an attempt to get on the bandwagon and not be out of the game.
Based on that, Verizon and AT&T should be concerned.
In any case, both T-Mobile and Sprint are being very cautious when it comes to reaching an agreement. According The Wall Street Journal, Sprint would have added a clause to its contract with Google that would allow it to renegotiate the agreement in case the search giant achieves a large number of clients.
Given the popularity of Google, that could happen in no time. Smithen believes that Google will pay $ 750 million to Sprint and $ 250 million to T-Mobile for its service in 2020That is, Google could sell a billion dollars in wireless services in just three years.
Will Google Succeed in the Mobile Phone Business?
According CNN Money, “the odds of Google beating the Big Four on its own turf are slim to none“Since, unless you choose to build your own network - and that would require a huge amount of money and time - you will always be forced to offer your service through the network of one of the four companies.
Still, Google could benefit from the initiative.
In recent years, Google has had some friction with some of the mobile phone operators. Verizon, for example, has blocked the installation of the Google Wallet application on its phones and has set Bing, Microsoft's search engine, as the default search engine on some of its devices. For its part, Google has made some statements against the speed limitation that AT&T and Verizon impose on their customers once they have reached a certain limit.
In any case, the plan is not without risks: when service or connections fail, clients They will not remember Sprint or T-Mobile, but will blame google of the problem.
What differentiates Google from other participants
Google is not the first to try to break into this market. Others like Best buy, Staples or Wal-Mart they already offer mobile phone plans to their customers.
However, according to sources familiar with the subject he cites The Wall Street Journal, Google's service will offer something completely new: the ability to switch between carriers, instead of sticking to just one.
The service would have a new technology that would search among the mobile connections provided by Sprint and T-Mobile and the available Wi-Fi access points, and would choose the option with the best signal at all times to route calls, texts and data.
The goal of Google, according to these sources, is to achieve the fastest and best quality connection for users, without them having to worry about having to establish a long-term relationship with an operator.
According CNN Money, If Google's plan succeeds, it could lay the groundwork for Apple to do the same for every iPhone. In fact, the company already raised the alarms in October, with the presentation of new iPads that included a SIM card capable of working with three of the four major US mobile phone operators.
Of course, Facebook and other companies interested in users connecting to the Internet they could join the bandwagon.
When and where will the service start operating?
It's not entirely clear yet in which areas Google plans to offer its service, how much it would cost, or which mobile device manufacturers have already agreed to work with the company in case the new service goes ahead.
According to sources cited by The Wall Street Journal, the service could be launched during the first half of this year and, it will probably be available nationwide, although it seems that the launch date would have already been delayed several times - the last one, in October 2014 - so it could happen again.
For now, Google has declined to comment on the matter.
We will see what happens throughout this year ...