Don't get so excited: A Google wireless offering would be a snooze


The Information this morning is reporting that Google hopes to offer mobile wireless services in the markets where it has built fiber networks.

If Google does end up offering wireless services in those markets, the offering would be an incremental add-on, not a remarkable new service for residents like Google Fiber. In fact, it would be so incremental it's hardly worth doing.

That's because, according to reports, Google would use an existing cellular network, possibly Verizon, to offer the service. Take a look at history. In the wired and wireless worlds, companies that try to offer services to end users by piggybacking on someone else's network seldom have runaway success.

Probably the biggest name mobile virtual network operator you can think of is Virgin Mobile and it's now owned by Sprint, the company whose network it uses. There are many, many MVNOs that have failed. Plus, MVNOs don't offer all the latest and greatest phones or services. They're niche players constrained by a significant fixed cost -- renting network time from the operator that built the network.

They're also constrained by the capabilities the operator decides to build into their network. In fact, that's part of the reason that Google is building its own fiber networks. The existing pokey networks were no good. Google wanted to be able to deliver faster service than the existing broadband providers were offering.

Google may have some hope of leveraging its fiber networks to boost what it can offer in a cellular service, for instance, by using Wi-Fi. If Google can push voice and data use onto Wi-Fi networks that are backhauled by its fiber network, it can reduce its reliance on the cellular network, thus reducing costs.

It's been pretty well proven, though, that hanging Wi-Fi access points around town isn't economical. Each access point covers too small an area, requiring far too many to make sense, particularly when you factor in the cost to access municipal property like light poles to hang the access points. 

Using Wi-Fi in homes and buildings might make a bit more sense, but that's not particularly novel. Sprint is doing it currently. T-Mobile used to offer a Wi-Fi router in homes that automatically shifted voice calls to the Wi-Fi network. I tried the service for a while and it worked decently. The problem for T-Mobile and currently for Sprint is that the services are limited to certain handset models. If Google can offload voice and data to Wi-Fi on any mobile phone, it might have a mildly interesting service and business model. Mildly interesting, not particularly exciting.

One more possibility is that Google hopes to finally figure out a way to eliminate the phone subsidy model that carriers in the U.S. use. It's tried before, when it set up an online store that would let users pick a phone then pick an operator and service plan and check out. That was a short lived experiment because Google failed to get the cooperation of the mobile carriers. As an MVNO, Google gets more control over the relationship between phones and its network but not enough control over the economics. It still will have costs it can't control related to essentially renting network use from an operator.

Google might want to offer a mobile service to its fiber customers so it can offer a bundle and maybe do some experimentation. But given that it won't own the wireless network, the potential is very limited. 

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