Okay, so maybe Google isn’t out for world domination, but the with Project FI tech giant has recently made some major advances into the Telco space that I have anticipated for some time now. Several trade articles this week revealed that Google is in discussions with Hutchison Whampoa, the owner of the mobile operator Three, to form a wholesale access agreement that would not only become a critical part of Google’s plans to disrupt the U.S. mobile market with its own virtual network (MVNO), but would also allow Americans to use their mobile devices abroad at no extra cost.
Google is creating a global service that will cost the same to use for calls, texts and data, no matter where the user is located. Through this type of network, roaming costs would essentially be eliminated. And while roaming costs are not a huge revenue generator for operators on the consumer space (consumers often opt not to use mobile networks when travelling abroad), operators gain a large portion of their revenues from enterprises with employees who must who must use their mobile devices internationally for business. Google’s new offering has the potential of eliminating this revenue stream for operators.
In the U.S. alone, there are over 76 million Android devices currently being used. With a new Google service allowing for flat rates no matter where one is located, I expect a huge exodus from those currently subscribed under Verizon Wireless, AT&T, Sprint, and other carriers to Google’s new service. Consumers who pay their own mobile phone bills would move just for the fringe benefit of not having to pay extra (or not use their mobile phone) when they travel. Enterprises would move for the huge savings in roaming charges.
A new “flat fee” network from Google would have a major impact on both traditional operators and over-the-top (OTT) providers since users won’t be limited to either paying high roaming charges or leveraging services such as Skype to make inexpensive or free overseas calls. In my opinion, what would be an absolute killer move for Google is if they decide to offer video-over-LTE (ViLTE) at the same rate for both domestic and international, as this would make using the Google service BETTER than using OTT when traveling abroad due to the quality of the connection.
While I commend Google for continuing to expand into new areas, I am torn about how this new network will ultimately impact the market. The new service will clearly trample all over the MVNOs that my company, Movius, supports with its myIdentities solution – which includes split-billing capabilities and can be used by employees traveling abroad. On the other hand, time-division multiplexing (TDM), the foundation of Google’s planned network is a strong point of Movius’ solutions. As a result, our offerings will continue to work seamlessly with Google’s new network and therefor create new opportunities for us.
What is your opinion on Google’s expected moves into the mobile network space? Please share your thoughts.