Earlier this month, reports emerged claiming that Google was planning to launch its own wireless network called, at least in its developmental stage, Nova. The reports claimed that Google would partner with Sprint and T-Mobile for the network, notably without any contribution from the two biggest United State carriers, AT&T and Verizon.
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The idea of Google starting its own wireless network, even as a mobile virtual network operator (MVNO), could mean a few things for the wireless industry. For one, should Google offer competitive enough prices, which we can only assume it will at least try to do, the company could easily strike fear into AT&T and Verizon. The “big four” carriers in the United States have essentially had a hold on the cellular service market for years now, with there also being a distinct gap between the top two – Verizon and AT&T- and the bottom two – Sprint ant T-Mobile.
MVNOs have, for the longest time, tried to eat away at the business of the large carriers with lower prices, but they’ve all lacked something that Google has mastered, and that’s branding. If you were to ask a group of random people if they’d heard of some of the “biggest” MVNOs, such as Boost Mobile and TracFone, many would probably say no. Customers are also hesitant to give their money to companies that they see as second-tier and non-reputable. If Google were to assign its brand to a mobile network, however, it would instantly gain credibility, even if it wasn’t necessarily any better than the offerings of other MVNOs.
Look at a company like Simple Mobile. The carrier offers SIM cards from T-Mobile and offers prices that are significantly better than what you would get from a major carrier, but yet, with a small but certainly respectable 3 million subscribers, Simple Mobile has hardly made a dent in the market. Google putting its brand behind similarly priced plans, even as an MVNO, could spell fear for AT&T and Verizon.
A report this weekend from the Wall Street Journal suggested that Google’s Nova wireless network would automatically switch between T-Mobile and Sprint connectivity based on which network offered the best service at that given time. Price, according to the report, would also play a factor in this process. Sprint and T-Mobile would essentially enter a pseudo-bidding war for that momentary user connection. A bidding war would inevitably drive down the price for the end-user, again potentially giving Nova a price advantage over AT&T and Verizon and giving users the best service possible.
“It’s a very aggressive move,” said Dave Fraser, CEO of Devicescape, a company that is stitching together a network of millions of Wi-Fi hot spots world-wide. “You can imagine Google driving down the price to be disruptive and paying for it with revenue from other services that the company already provides, like search and advertising.”
Last year, with the iPad Air 2, Apple launched something it called “Apple SIM,” which allowed users to purchase a single iPad model and choose at the time of activation on which network they wished to use it. Again, notoriously absent from the option was Verizon. The downside to Apple SIM, however, is that once a user chooses a network, they can’t switch to another one if they find out the service is terrible. Google’s Nova network will reportedly work the opposite way and allow users to switch to whichever network has the best service at a particular moment.
Google, of course, also has its Search and Advertising business that could play a significant role in its wireless network efforts. Amazon, for example offers deep discounts on its Kindle e-readers if users choose a model with “special offers,” which are basically advertisements. Google could potentially do something similar, offering discounted monthly service bills in exchange for a small amount of ad space in the smartphone. One potential location for these advertisements on Nova could be Google.com, which is of course ad-free on all mobile devices right now.
Google’s Search business also offers a huge place for the company to advertise its own wireless network. Google.com has always been nearly ad-free, but the company has never been afraid to put small advertisements for its own products on it, including the Nexus 7 tablet. Putting a simple sentence about Nova on Google.com would drive an extraordinary amount of traffic to the Nova webpage.
One piece to the puzzle that many are failing to consider with Google’s Nova network is the company’s extensive offering of communication channels with Hangouts and Gmail. Google will undoubtedly heavily integrate Hangouts into whatever sort of wireless network it offers. Potentially, deep Hangouts integration could even mean that Google wouldn’t have to sell voice minutes to customers and would instead route all calls through Hangouts over a data/WiFi connection, depending on what was available.
Google entering the wireless industry in the United States has the potential to truly shake-up the way the two big carriers, AT&T and Verizon, do business. Offering lower prices, consistent and strong service by switching between T-Mobile and Sprint towers on the fly, and eliminating the idea of voice minutes would mean that AT&T and Verizon would have to make their own changes to counter Google’s Nova network. Google, of course, also offers something other MVNOs don’t, and that’s a brand that everyone has come to know. Think of what Google Fiber has done in the few markets in which it’s available, but on a much broader, nationwide scale.