For years, rumors have circulated that Google could one day become a wireless carrier. Today, those rumors have finally come to fruition. At Mobile World Congress in Barcelona, Google's Senior Vice President, Sundar Pichai, said the search-engine giant would launch its own mobile service by the end of 2015.
And while Google isn't describing its new venture as the ultra-cheap cell phone service that our budgets have dreamed of, Google's wireless network plans could still have a profound effect on our wallets.
Google's Service Will Be Similar to Boost, Cricket, and Straight Talk
Pichai made it clear that Google has no intentions of competing — in the technical sense at least — against the four big providers, Verizon, AT&T, Sprint, and T-Mobile. Instead, Google is looking to become a Mobile Virtual Network Operator, a wireless provider that doesn't own its infrastructure, but instead leases it from an existing wireless carrier. Google will then set its own retail prices independently.
Why would a wireless carrier like Verizon or AT&T agree to such an arrangement? In a nutshell, they have no choice. Regulators came up with this scenario to ensure robust competition for consumers. That has led to the formation of companies like Boost, Cricket Wireless, and Straight Talk. According to the Wall Street Journal's sources, T-Mobile and Sprint will provide the backbone for Google's still unnamed MVNO.
Google Wants to Change the Way We Make Phone Calls
Google isn't ready to talk prices, but instead says its aim is to demonstrate technical innovations that existing carriers should adopt. For instance, Google wants to make calls seamlessly transition from cellular to WiFi networks in areas where cellular coverage isn't particularly strong. (This is something T-Mobile is currently working on too.)
Such an accomplishment could completely eliminate dropped calls and expand coverage dramatically, something all carriers (and consumers) could benefit from. However, many consumers might not be concerned with dropped calls, especially if they live in a major city with good signal strength. Fortunately, even if Google doesn't announce cutthroat prices, the mere fact that Google is entering a highly-competitive market could have huge effects on the industry.
This Could Scare Other Carriers Into Offering Better Deals
While we can't be certain what effect Google's move into cell service will have on the industry, there is a precedent. In 2011, Google announced Google Fiber, the company's Internet and TV service which promises Internet speeds of 5Mbps to a blistering-fast 1Gbps. When Google started rolling out its Fiber service, traditional ISPs scrambled to compete offering faster speeds at much lower prices. The Google Fiber effect was a boon for customers who otherwise had little-to-no alternatives.
It's very likely we'll see a similar scenario play out when Google launches its mobile service later this year. Competition is so tight, that the slightest change in the market could result in price cuts or higher data allowances, something we've already seen happen this year with Verizon. Moreover, Google has been cautious with its words. Its given itself enough wiggle room to fully launch its own network, should it feel the need to do so in the coming years.
Google is expected to make a more detailed announcement regarding its new service in the coming months, possibly at Google I/O in May.
Readers, what do you think of this news? Would you ever give Google a chance as a cell service provider, if it was cheaper? Have any of you see the "Google Fiber effect" in your hometown via less expensive Internet service? Sound off in the comments below!