Will ATT Overtake Verizon Wireless With Its Newest Move

25 Jan 2015 | Author: | No comments yet »

Google to Become Own Cellphone Company.

MOUNTAIN VIEW, Calif. Google is looking to vertically integrate in a major way: the search giant is reportedly in discussions with Sprint and T-Mobile US to launch its own wireless operator service. — Internet users from San Jose to Kansas City have been clamoring for Google to lay down its long-awaited fiber-optic network to compete with Comcast and AT&T in speeding up Web and television access. The Information reported last week that Google will do so under a new project to be called “Nova” which will be led by its longtime executive Nick Fox. Reports that Google plans to sell its own mobile-phone plans this year sent a warning to the telecom industry and were met with enthusiasm from consumers, officials and analysts hoping the move will push down prices and inspire better service.

Google is making unprecedented steps into the telecom game, indicating the tech company wants to be far more than just your search engine or e-mail provider. Google’s push to offer faster, cheaper wireless service plays into the company’s goal to get Internet access to more people, who then will visit more websites, provide more information about themselves and see more Google ads, generating more revenue. But it is a well-known fact that wireless service business is already under tremendous pricing pressure and is it the right time for Google Inc (NASDAQ:GOOGL) to get into this business. As cell phones’ monthly plans have become more affordable all over the world and smartphones also give the user access a many world with the touch of a button, the landline has become less of a necessity.

Unlike Google Fiber, its emerging broadband effort for which it is installing its own cable, Google has no plans to compete as a wireless carrier by building a vast network of cellphone towers. And, with YouTube gearing up to launch original streaming video series later this year, it’s a prime distribution opportunity and another way to boost the value of advertising for over-the-top (OTT) service.

It seems Sprint, at least, is looking for more customers. (Video viaThe Wall Street Journal) “Sprint executives are betting that the boost from an influx of new Google customers outweighs the risk that the Internet search giant will learn too much about the ins and outs of the wireless business.” Much like its Google Fiber broadband service, Nova seems intended to pressure the rest of the wireless industry into cutting its prices and improving its services. Android Police writes, “a Google-led cell phone service could drive prices down and give Google control over distribution and software of their (and other OEMs’) devices.” Of the two giant wireless carriers Google apparently aims to disrupt, AT&T also declined to comment and one of Verizon’s top executives brushed aside any fears its shareholders might have about Google’s wireless ambitions. Verizon’s chief financial officer, Fran Shammo, referred to the search-engine giant as “just another competitor” in an intense market during an earnings call Thursday. “If you look at Google, they have entered the fiber.

Google’s aim is to become what is known as a mobile virtual network operator, or MVNO, reselling the services it buys from major carriers by offering its own Google-branded data or voice plans. “Resellers, or people leasing the network from carriers, have been around for 15 years,” Shammo told Verizon investors. “It’s a complex issue. Other choices included YouTube, “directly from a friend,” Google, Twitter, Tumblr, Instagram, Pinterest and others – but none came close to Facebook’s numbers. But still a lot of question still remains unanswered like, when and where Google will start operating its service and what prices they will opt to put pressure on other big players like Verizon and AT&T?

Google siding with the underdogs could be a “game-changer” in the long run, grabbing market share from the giants, Pacific Crest analysts Michael Bowen and Trevor Upton wrote in a note to investors. “Any time Google does something it rightly catches people’s attention because they can take big steps like this,” said Matt Wood, policy director at media-reform group Free Press. “But I wouldn’t overstate the importance of it. Sprint reportedly added a clause that calls for a renegotiation if the service volume gets too high (in other words, if more people start choosing Google over its services). There are other people who do the same things, including big-box retailers like Wal-Mart.” Google Fiber has rolled out its cables and utility poles in parts of Kansas, Missouri, Utah and in some Austin, Texas, neighborhoods, with plans to expand to San Jose, Santa Clara, Sunnyvale, Palo Alto and its home, Mountain View. “It’s more convenient because you can be a one-stop shop,” said John Bergmayer of Public Knowledge, a consumer-advocacy group. “Once they bundle these products, they can give a little discount.” Whatever its plans, Google has not yet sought the permission to offer wireless service from the Federal Communications Commission and the California Public Utilities Commission, though both agencies are likely to welcome another competitor. It hasn’t had to deal with these sort of tasks often, given most of its services are ad-supported and can be offered for free – not to mention shouldering the blame if any wireless coverage gets spotty or goes down. According to the Wall Street Journal, Google lobbied to free up a large amount of low-quality wireless spectrum that could connect people within short distances.

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