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Google an MVNO? There's 'Little True Downside'

By Kimberly Koerth
April 08, 2014 - News

Google might be considering plans to offer wireless service in areas where it already has Google Fiber high-speed Internet in place.

The company is mulling becoming a mobile virtual network operator (MVNO), buying access to a larger network at wholesale and reselling it to customers. There is speculation that Google discussed the possibility of becoming an MVNO with both Verizon and Sprint in the last year.

Google currently has fiber networks in Kansas City, Mo., and Provo, Utah, with another coming soon to Austin, Texas. It recently announced plans for expansion into nine other metro areas including Atlanta, Phoenix and Portland, Ore.

Although Google already competes indirectly with phone companies through voice and video services, a move into wireless would elevate it from just a producer of phones to a direct competitor with the other broadband carriers, some of whom have already felt pressure to compete. After Google's Austin announcement, AT&T installed its own high-speed fiber network that launched in late 2013. AT&T transfers users to Wi-Fi hotspots to ease network congestion; Google might use a similar tactic and rely on carriers only when service through Wi-Fi access points is unavailable or insufficient.

“Google has been treating telecom like a ‘hobby’ for a while now. The time has come for it to make a truly disruptive move. It requires a handful of moving pieces, most of which are close today but not all the way there," Yankee Group senior analyst Rich Karpinski noted, commenting specifically on an article by The Verge. "Deploying small cells and wide-area Wi-Fi in areas where it's already launched Google Fiber would pave a powerful long-term path. There are wholesale, device-maker and even existing MVNO partners that would be more than willing to go there with Google. There's little true downside here – the costs would be a blip on its balance sheet, as long as it doesn't acquire spectrum or an operator – and plenty of disruptive upside. Put up or shut up time has come."

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