Google has brokered wholesale deals with Sprint and T-Mobile US with a view to launching mobile services, it emerged this week.
The Internet giant will roll out mobile virtual network operator (MVNO) services in the U.S., the Wall Street Journal reported on Wednesday, speculating that it might launch in areas covered by its own fibre broadband services.
The paper, which cited unnamed sources, said it does not have information on when Google plans to launch, nor on how much it will charge.
However, the sources said that Google has agreed separate MVNO deals with the third and fourth largest mobile network operators in the U.S. after lengthy negotiations with top management. Google first approached Sprint 18 months ago and because of the nature of the deal both former CEO Dan Hesse and Masayoshi Son, chairman and CEO of parent company Softbank, were involved in discussions.
Allowing the likes of Google into the market was doubtless a tough decision. The Internet firm has the potential to become a serious rival to the U.S.’ network operators, whereas most other MVNOs tend to offer niche or highly targeted services that the network operators would otherwise struggle to reach.
If the Journal’s sources are correct, Google will likely enter the market as a lower-cost player, encouraging more people to use the mobile Internet and driving revenue to its core search business. A price war is not out of the question.
It will not be plain sailing for Google though. Providing mobile services will require the firm to deal with customer service and billing, something it has not proved adept at in the past. The company was strongly criticised from a customer service point of view when it launched its first Nexus smartphone in 2010. I t quickly closed its online store and abandoned the direct sales model.
