The March rumblings are coming to a head. Google will challenge the status quo in the wireless space with its own Mobile Virtual Network Operator (MVNO) service sooner rather than later. In fact, news reports suggest that Google could launch a U.S. wireless service on Wednesday.
Google could not immediately be reached for comment. But at Mobile World Congress in Barcelona last month, the company announced clear cut plans to launch a wireless service in the U.S. Google executive Sundar Pichai (pictured) didn’t reveal all the details, but he did offer just enough to generate plenty of buzz for what he described as a small-scale service.
“The core of Android and everything we do is to take an ecosystem approach and [a network would have] the same attributes. We have always tried to push the boundary with the innovations in hardware and software,” Pichai said in an on-stage interview at the time. “We want to experiment along those lines. We don’t intend to be a network operator at scale. We are actually working with carrier partners. Will announce something in the coming months.”
Why Consumers May Like This
The biggest difference between what Google is offering and what the rest of the market already offers is a pay-as-you-go model. Several news reports indicate Google will allow customers to pay only for the amount of data they use each month instead of forcing them to choose pre-set buckets of data.
This could be attractive to consumers. Mobile analytics firm Validas released a Wireless Waste index in 2013 that measured overspending on wireless billing. Wireless waste is essentially the value of the difference between what consumers pay for mobile plans and what they actually use. Globally, Validas estimates wireless waste cost consumers over $926 billion in 2012. When you break that down to the individual consumer, it comes out to about $28 a month.
Google is reportedly working with Sprint and T-Mobile, the third- and fourth-largest wireless carriers, to operate its MVNO. At launch, the opportunity for consumers is limited. The service will only work on Google’s Nexus 6 devices.
Google appears to have much more to gain than to lose. According to IDC’s latest data, Android holds 81.5 percent of the smartphone operating system market, gaining 32 percent in the past year. By way of comparison, Apple owns 14.8 percent, Windows Phone holds 2.7 percent, and BlackBerry has .4 percent of the market.
Shaking Up the Industry
We asked Jeff Kagan, an independent technology analyst, for his thoughts on Google’s big reveal. He told us Google already has a presence in wireless with its Android operating system and Nexus phones but now the company is positioned to offer the complete package as a service provider.
“They started with Google Fiber and now they are rolling out this wireless service,” Kagan said. “Google is going to price it in a way to attract customer attention.”
How will the market respond? As Kagan sees it, there are three clear paths from here: Google could grab market share from existing wireless carriers; Google could change the wireless marketplace; or Google could all-out fail.
“We don't yet know what Google's entry into the space will do. We'll have to wait and see,” Kagan said. “But they're going to go in with the intention of transforming the idea and the financing for the entire wireless industry.”
Whether Google succeeds or fails with its latest wireless effort, Kagan said he expects the company to bring some new ideas to the wireless marketplace. Of course, Google is not the only company pushing new envelopes in an ultra-competitive market. But if Google’s pay-as-you-go data paradigm hits big with customers, it could force AT&T and Verizon to follow suit.
Image credit: Google CEO Sundar Pichai by Google.
Posted: 2015-04-22 @ 5:55pm PT
This is a field experiment. When it is finished, Google and cooperating partners will have the proof of concept that users can get the most important info that they need from the internet of things organized by Google's Next-home, Next-auto.... Next-Nest. Info will arrive JIT with just enough latency not to cause peak loads on telcos or WiFi. Personal assistance with inputs from thousands of things will be organised on the cloud and delivered to users' always on mobile device using surprisingly little bandwidth.
Posted: 2015-04-22 @ 2:53pm PT
The concept of "wireless waste" is faulty: the infrastructure cost to the carriers is a fixed cost, whether users transfer data or not.
Buzz terms aside, Google's entry as an MVNO is welcome competitive pressure on an industry that has exploited its monopolistic power for too long.
Pay-as-you-go is a step in the right direction. Even better would be time/location based floating price: force network operators to offer service to every handset (not just those tied to their networks) and to publish current prices in real time, variable per tower. Prices will be high at times and in places of high demand (such as conferences) and low, very low, during other times.