What if Google got into the telecommunications business?
By Jed Hallam, Mindshare
Rumours have surfaced that Google is close to launching a telecommunications network
of its own. According to leaked information, Google ‘Nova’ is set to launch this year after deals with US carriers Sprint and T-Mobile were agreed. While there have been rumours of this kind numerous times over the past five years, it is believed that Google is finally in a strong enough position with Android to push against the incumbent telecommunications businesses.
Details and implications
Google ‘Nova’ would be a Mobile Virtual Network Operator (MVNO) – much like GiffGaff, which means that the network would actually run off of an existing telecommunications providers network (hence the deals with Sprint and T-Mobile). This would reduce its costs (for physical infrastructure) but allow Google to drive voice calls (likely to be for free) through Google Hangouts.
As with its email product (Gmail), this service is likely to be run at a cost to Google (so free for consumers) in order to attract vast swathes of users. This type of behavior (eating the side dishes of the telecommunications industry, rather than the full lunch) is already exhibited by Amazon and it’s free Kindle 3G service. The ‘payment’ for users would (as with other Google products and services) be the surrender of personal data, and allowing Google into another aspect of their lives. With Google increasingly infiltrating the ‘offline’ lives of consumers too, this move would allow it to combine online and offline data to provide advertisers with a much more rounded view of how people behave.
Launching its own MVNO would also give Google more control over handset discounting, as it could heavily discount Android handsets – or even sell them at a loss – with an eye to further increasing penetration of Android, and stiffening competition with Apple and Xiaomi.
From an advertiser’s perspective, this would be akin to combining Google’s existing consumer data with that of Weve’s (a joint venture between the UK’s three largest mobile network operators) - allowing for a much more detailed view of consumers, and giving advertisers greater access to those consumers across a broader number of devices.
Whether this would be allowed to launch within Europe (given the EU’s continuing scrutiny over Google’s approach to privacy) would be interesting, as would the reaction of consumer privacy groups. It would also, surely, begin to bring into view conversations about the increasing monopoly that Google holds over such a huge volume of people.
Of course, you may remember when Google announced similar intentions
back in 2010, and while these types of announcements are usually intended to ‘prod’ the telecommunications industry into behaving in a more ‘Google like’ manner, it was only a year after that Google Fibre was launched (and is now in nearly forty different US cities).
While Google ‘Nova’ would inevitably face challenges on privacy regulations, monopoly regulations, and consumer trust issues, it would be dangerous to bet against Google, as various email providers did years ago.