Monday, January 26, 2015

Report: Google to Launch MVNO in U.S.

U.S.-based global internet giant Google is preparing to sell mobile services directly to customers and manage their calls and mobile data over a mobile network, according to a news report based on information from several persons with knowledge of the plans. The new service is expected to run on the networks of Sprint and T-Mobile USA, two people said. Google is expected to buy wholesale access to the networks and operate as an MVNO. The project, code-named Nova, is reportedly being led by Google executive Nick Fox, and a launch is expected this year.

It seemed inevitable that sooner or later, Google would become a player in the mobile telecommunications market. And now it appears that it will happen—sooner rather than later. Google has already entered deeply into the mobile universe, by way of its mobile operating system Android, the apps sold through Google Play, its email and other web-based services available on mobile devices, and via Google Talk, which is available on mobile devices as well as on PCs. Google Talk enabled voice calls, but on a VoIP basis only. If its MVNO venture goes ahead, Google will be offering genuine cellular connectivity. And considering its size and scope, and in particular the size of its user base, Google will be mounting a big challenge to the traditional MNO players, not to mention the MVNOs in the U.S. market. The fact that the company has apparently negotiated itself a dual-carrier deal for its MVNO services is highly relevant; by running on the networks of both Sprint and T-Mobile, it is making sure not to allow itself to be beholden to any one company, and thereby to have as much autonomy as possible. And of course it makes sense that Google will be working with the third- and fourth-ranked MNOs rather than with market leaders Verizon and AT&T; Sprint and T-Mobile have more to gain and less to lose by the partnership.
“Google’s full-fledged involvement in the telecom sector is something operators have long feared. Though for now Google will only be an MVNO, albeit most likely a very large one, a day may come—sooner rather than later—when it uses its huge capital resources to buy up network outright and become an MNO.”
Melissa Mascarenhas, Research Analyst at Tarifica

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues or to speak with the research team:

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