Google to Bring True Competition to the US Wireless Market?
Yesterday the WSJ reported that Google was in negotiations with T-Mobile and Sprint to launch its own mobile service as an MVNO on their networks:
Google Inc. is preparing to sell wireless service directly to consumers after striking deals with Sprint Corp. and T-Mobile US Inc., a move likely to prod the wireless industry to cut prices and improve speeds, according to people familiar with the matter.
It isn’t clear how widely the Internet search giant plans to offer wireless service, how much it will cost or when it will go on sale. Google might start small by limiting the new service to certain U.S. cities or to users of its Google Fiber broadband Internet service.
For those who don’t follow this type of tech news, let me explain why everyone is so interested.
It’s not just that anything Google does is newsworthy (this is true) but also that we expect Google to be a disruptive force in yet another industry.
The US has the slowest and the most expensive mobile broadband of the developed world, and the popular view is that none of the established players are really all that interested in actual competition in terms of faster speeds, lower costs, and better service.
I would repeat what Europeans have told me about US broadband costs and speed, but most of the words are unprintable or carry legal liabilities. (They are also words that you and I have probably already used to describe our internet service.)
But if Google enters the market, this immensely rich tech company is expected to offer a service with a lower cost and a faster speed than its competition. That’s what Google did when it got into the wired broadband business in 2013.
Google’s broadband service (Google Fiber) is only available in a few markets at this time, but just the threat that it will enter a market is enough to scare telecoms into dropiing their prices and increasing speeds.
Miller was among the first in Austin to sign-up online for Google Fiber when it was announced in April 2013. His hope: that Google’s $70 faster 1-Gbps service would be the answer to his problems.
But then he got a call from AT&T with an offer for its new GigaPower service. Even though the 1Gbps service wasn’t yet available, AT&T offered Miller 300Mbps — more than 15 times the speed he was paying for. The best news was that the cost of his service would drop from $208 a month to $120. When AT&T finishes upgrading the electronics on the network later this year, he expects to see a 50-fold improvement. With network speeds this fast, Miller could stream without buffering at least five high-definition videos at the same time and still have enough to play his games and surf the Web.
And that is exactly what we are hoping will happen with mobile service.
In my area, mobile broadband is only about a 4th as fast as wired internet (at best), and since it’s metered it is also infinitely more expensive. But if Google enters the market I would expect that the speeds will increase dramatically as the price drops.
I am particularly interested because if the service gets fast enough and cheap enough, it might actually be possible to switch to a mobile only data service and drop the land line entirely.
I can’t wait to see if it does.