Should Google play carriers at their own game? There's never been a better time
MVN... Oh yes
Analysis In the week that Microsoft made its last, best bid for mobile relevance, Google was active all over the mobile ecosystem. It had recently announced an investment in satellite venture SpaceX, and was said to be stalking mobile payments outfit SoftCard, and even planning to launch direct mobile services via its own mobile virtual network operator (MVNO) deal.
Some of these reports are closer to reality than others, but all of them reflect on the scale of Google’s ambitions to bring internet access – shaped around its own revenue generators – to every user in every location and time of day. That may involve Google elbowing the operators out of the value chain in order to encourage faster and more radical process, and greater support for the open platforms that power the expansion of Google’s services. It is building its own networks – from fibre to Wi-Fi to space – and, if it bought SoftCard, would replace the US’s major cellcos in charge of a significant m-payments network.
And of course, an MVNO deal would enable it to reach users directly, even before it gains its own infrastructure.
This may be the year when Google really starts to pursue that anti-carrier agenda in reality, not just in headlines. It has been laying some groundwork – though most of it only in the US, apart from emerging market activities with white spaces and balloons. But until now, in reality, once you get beyond the R&D labs, the grand public pronouncements and the FCC lobbying, Google has been accommodating to operators, which remain a significant distribution channel for Android devices and services.
Attempts to undermine them, such as the original launch of its Nexus own-brand devices as a direct-to-consumer offering, created significant carrier backlash and Google retreated rapidly rather than see operators turning hostile to Android.
However, if it tried the same trick today, it might not be so intimidated. Just as Apple has introduced the user-transferable SIM card, an idea that was crushed by operator hostility a few years earlier, so Google could be far more aggressive in pursuing control of the whole mobile and internet chain this time around.
The more Wi-Fi and over-the-top services drive and fragment the market, the less Google will need to be friendly to mobile network operators (MNOs) and telcos. It certainly wants to control critical aspects of the internet value chain, like m-payments, rather than have to make nice with carriers, so the purchase of SoftCard would be logical to bolster Google Wallet. And its Google Fiber and enterprise homespot buildouts will provide direct alternatives to services which were once only available from the owners of licensed spectrum or carrier-installed fibre.
Does Google really need to be an MVNO?
With Android and its services dominant among mobile users, and Google building its own networks in strategic target bases, the clear question is, why should Google bother?
One of the industry’s most popular rumours has come round again – that Google (or Apple) is about to offer mobile services directly to consumers via its own MVNO in the US. This time, Google is the focus, and a reported agreement with both Sprint and T-Mobile under a project codenamed Nova and led by executive Nick Fox.
According to a report in The Information, this is not so much a fully fledged attempt to create a new revenue stream from mobile services running on wholesale capacity, but an “experiment” to challenge the current status quo.
This sounds far more convincing than a conventional MVNO deal, though there are far more radical ways to disrupt the carriers, some of which Google is already supporting (Wi-Fi first services, dynamic bandwidth on demand ideas, alternative sources of spectrum and fibre which they don’t control). Google has no need for mobile service revenues, nor to boost sales of Android devices.
But it could use its own MVNO to experiment with new types of services and pricing, especially to be bolder than the cablecos have yet dared to be with ideas like Wi-Fi Calling and Wi-Fi first (in which a user only moves to a cellular network when Wi-Fi is out of range). It could also try to push its own-brand devices and platforms – Nexus, Android One, the forthcoming Ara and so on – more aggressively to try to fight off "de-Googled" Android products, though there are more effective ways to do this than to lure consumers with cheap minutes.
By contrast, disturbing the MNOs’ sleep, and showing the industry that alternatives to the controlled models of the telecoms industry can work, are common patterns of behaviour for Google, dating back to its early metro Wi-Fi projects, its investment in Clearwire and WiMAX, and its threat to buy the national 700MHz spectrum licence in the 2008 auction unless new rules on open access were accepted.
An MVNO deal might fall into the same category, and allow Google to move the goalposts with more immediate effect than its projects to build its own networks or create visionary, cloud-based bandwidth management systems. But there's one thing these reports, if true, will not mean: Google becoming a conventional mobile operator.
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