Google set to launch Sprint and T-Mobile MVNO - reports

Google is planning to start an MVNO business, which according to unnamed sources quoted by the Information would operate on T-Mobile US (TMUS) or Sprint’s network. The report claimed the project, apparently codenamed Nova and headed by Google Executive Nick Fox, is set to launch this year.

The report was quickly followed by the Verge, which claimed it has been able to verify the plans really are in progress, and that Fox wanted to launch the service already last autumn. The Wall Street Journal (WSJ) also reported on the matter, claiming Google has already struck deals with both Sprint and TMUS to buy wholesale access to the USA’s third and fourth largest mobile networks (respectively).

Further details such as how wide a service the online search giant would offer, are not clear. But there has been speculation it could limit coverage to certain cities or only make the service available to its Google Fiber broadband customers.

It is worth noting Google, as well as Apple and other big Silicon Valley players, have been linked to speculative MVNO deals every so often over the last decade or so. When contacted by Telecoms.com, a representative for Google declined the request saying the company doesn’t comment on rumours or speculation.

A move into the mobile service business would mark a new era for Google not only in terms of market segment but also in terms of its relationship with customers. With its free advertising-based offerings the firm currently largely avoids having to conduct customer service activities or direct billing, which it would have to do as an MVNO.

From the industry point of view, Google’s entrance into the wireless service market would likely cause an ever fiercer price war, and shake up the US telecoms market. Although Google probably couldn’t make a huge dent in the market share of the biggest players AT&T and Verizon Wireless, it could change the mobile landscape by beginning to offer low-cost, localised services.

According to the WSJ, Google has been lobbying the FCC for some time to make available higher spectrum frequencies, which are largely deemed not suitable for mobile services. However, these bands could potentially be used in smaller areas.

As an MVNO, with the backing of one or two established operators, Google might also be able to better sell its Nexus smartphones. At the same time, the operators would gain revenues from selling network access to Google, and gain new customers without having to handle marketing, customer relationship management and billing. But other carriers would probably view any MVNO agreement with Google as a potential threat to the whole industry, and back-door access to an already dominant internet company to the mobile market.