Google could soon be a wireless provider

Chuck Bednar for redOrbit.com – Your Universe Online

Already responsible for one of the most popular mobile operating systems in the world, Google is now preparing to take on a new facet of the tech industry: wireless service.

According to a story published last week by The Wall Street Journal, the Mountain View, California-based tech giant has made deals with Sprint and T-Mobile to offer its wireless service directly to consumers.

While it remains unclear exactly how Google plans to offer its new service, how much it will cost, or when it will become available, WSJ, citing sources “familiar with the matter,” said that the move is “likely to prod the wireless to cut prices and improve speeds.”

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When will it happen?

The company could begin by offering the new service to select test markets in the US, or to those currently using its Google Fiber broadband Internet service. Under separate agreements with the two carriers, it will reportedly be reselling service on the Sprint and T-Mobile networks.

Sprint is the third-largest carrier in the US, while T-Mobile is ranked fourth. WSJ said Sprint executives are banking on the benefits of adding new Google customers will outweigh the risks that the online giant will gain too much detailed information about how the wireless business works.

Those deals, “would give Google a way to offer wireless service without taking on the daunting, expensive burden of building and maintaining a network,” the newspaper added. “Google still would have to wrestle with the tasks of customer service and billing that it has generally avoided by offering its advertising-supported services free.”

A long time coming

Google officials first approached Sprint over 18 months ago about a potential resale deal, also known as a mobile virtual network operator agreement (MVNO). The company has reportedly been working on the wireless project for more than a year, one of the sources told the Journal, with Vice President of Product Management Nick Fox at the helm.

“The preparations are part of a broader effort to increase Internet coverage,” the WSJ said. “As more people get better and cheaper access to the Internet, Google benefits because they are more likely to conduct searches, stream YouTube videos, send emails through Gmail or text using an Android smartphone.”

Kevin Smithen, an analyst with Macquarie Securities, told CNN.com’s David Goldman that Google is expected to pay only $2 per gigabyte to both Sprint and T-Mobile, meaning that they would be able to provide low-cost service that could make them a viable threat to the likes of Verizon and AT&T (currently the two largest wireless service providers in America).

Google’s foray into the wireless market “has been a long time coming,” Goldman explained. The company has been putting together the pieces for such a venture for years. In Android, it has one of the most frequently used mobile operating systems in the world, it makes and sells phones and it even runs its own VoIP phone service in Google Voice, he noted.

“The missing link has been the cell towers needed to build out a nationwide network,” Goldman added. However, he called the odds of Google surpassing one of the so-called “big four” carriers “practically nil… Short of building out its own wireless network, Google will have to go through one of the Big Four to get national coverage.”

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Source: http://www.redorbit.com/news/technology/1113320759/google-could-soon-be-a-wireless-provider-012615/