Google Gears up to Take on Wireless Service Market

Google

Google is gearing up to take on the wireless service market with its newly reported spectrum deal involving the nation’s third and fourth ranked carriers Sprint and T-Mobile. Sources report that the project, already underway for close to a year now, has a codename that sounds as magnificent as the potential scale of its concept, Project Nova.

Though details concerning budget totals, overall scope and release dates remain murky, company insiders have shared that talks began with the Kansas based Sprint Corporation as early as 18 months ago. Once successfully implemented, Project Nova would provide Google with what is known as a massive mobile virtual network operator arrangement, or MVNO. MVNO’s are standard arrangements between carriers that allow for companies to “lease” wireless telephone and data spectrum or airwaves between agreeing parties.

Through these wholesale agreements, companies can use the MVNO (in this case Google) to offer wireless services under their brand’s name and network yet still retain and gain new customers without having to face the financial hurdles of increased marketing and promotional efforts. Wireless carrier Tracfone is a great example of this type of arrangement as it has grown into the fifth-largest carrier from an MVNO with Mexico’s telecommunications giant American Movil. Picture the same scenario with a carrier that already has its software in more than half the smartphones sold in the U.S. as opposed to just a prepaid mobile phone provider and you have an inkling of just how big this deal could be. Google could leverage a wealth of products and offerings to its already sizeable fan base, flying the flag of whomever it so chooses.

In a nation now saturated with wireless offerings, Google gearing up to take on the wireless service market stands to encourage innovation amongst the various carriers. The deal bodes fairly well with all parties involved with Washington-based T-Mobile and Kansas-based Sprint obviously both benefiting from the increased revenues the arrangement may bring.

Amidst all the excitement, Google has stayed relatively silent, but did state its intentions in acquiring more and more wireless spectrum fairly clearly in a September filing with the Federal Communications Commission (FCC). Google executives were quoted in a statement saying they believe their most recent initiatives can help disrupt “barriers to investment” and “empower consumers.”

Traditional wireless subscribers are not the only ones excited on the heels of the announcement of Google’s newest deal. Tech analysts have of course weighed in on the potentials as well. Jan Dawson of consumer tech research and advisory firm Jackdaw noted that the move could definitely “pressure [other] carriers to improve their own products by showing new ways of offering service.”

Though armed with a noble enough goal, gearing up to enter the market as a wireless service provider is not Google’s only aim. Executives at the company have continued to lobby the FCC for vast amounts of low quality wireless spectrum with the theory that they can ultimately “make Internet bandwidth more abundant.” With this knowledge it is safe to say that the company looks to provide even more cheap wireless which will in turn give more people access to the internet where they will certainly have more opportunities to perform Google searches, watch YouTube and communicate via Gmail.

By Cameron Woods

Sources:

Wall Street Journal

ABC News

Business Week

Photo By slimmer_jimmer – Flickr License

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