According to a report Wednesday in The Information, Google is planning to launch its own cellular phone service.
The service could come into operation sometime this year. The move would mark a great shift from the search giant’s core business and could help build a strong alternate revenue stream.
Google is close to striking deals with Sprint and T-Mobile, two names from the Top 5 carriers in the U.S. to use their networks and infrastructure. The company would operate as a MVNO (Mobile Virtual Network Operator) by buying mobile voice and data network time at wholesale rates and offering non-contract plans to customers in the form of its own plans. It will also be the perfect chance for Google to sell even more Nexus devices, by subsidizing them.
Currently, it isn’t clear if Google will provide its own SIM cards, allowing users of any unlocked device to use the wireless network or whether the service will be limited to the company’s Nexus devices.
The project is reportedly called Nova and is already being tested by selected employees and can be traced back to 2013 when the search giant had begun testing a wireless network at its Mountain View headquarters. It is being managed by Nick Fox, Vice President of Product Management for Android.
Currently there are no other details on pricing or availability of Google's cellular service plans, or the phones to go along with it.
As mobile phone service carriers continue to struggle with rising costs and competitive pricing for wireless spectrums, Google’s entry into the market is likely to create further obstacles for them. Google’s discounted wireless data plans would pressure other major carriers to cut prices and improve speeds or risk losing customers to a powerful rival.
Google’s deal with Sprint and T-Mobile will enable the company to save up on infrastructure development costs and concentrate on customer service and user experience.
According to reports, executives from Sprint were concerned that Google could eventually become a competitor by learning the tricks of the trade as a result of this deal.
But with Google reportedly adding a sizeable amount of customers backed by its strong brand, both Sprint and T-Mobile could end up benefiting. The deal could also help wireless carriers drop surplus capacity and a high margin and in the process could also gain additional customers.
However, Google is yet to seek permission it will need to offer wireless service from the Federal Communications Commission and the California Public Utilities Commission. It will be interesting to see what Google has to offer in terms of conventional mobile service plans.