According to a January 21st article in the Wall Street Journal, tech giant Google is looking to expand its reach into the consumer sphere by becoming a wireless service provider. The plan is sell wireless phone service directly to consumers using the networks of Sprint and T-Mobile, according to the WSJ sources. Analysts, however, note there are a number of state and possibly federal regulatory hurdles to be overcome before the plan becomes reality.
Making arrangements with Sprint and T-Mobile would allow Google to offer wireless service without taking on the expensive task of building and maintaining a wireless network. The search giant would of course still would have to deal with customer service and billing, operations it has largely avoided to date through offering its advertising-supported services for free.
David Einhorn's Greenlight Capital was down 0.1% for the first quarter, underperforming the S&P 500's 6.2% return. In their letter to investors, which was reviewed by ValueWalk, the Greenlight team said a lot happened during the first quarter even though they made just a handful of changes to the portfolio and essentially broke even. Q1 Read More
Spokespersons from Google, Sprint Corp. and T-Mobile US Inc. had no comment when contacted by the WSJ.
More on Google’s wireless plans
Further details on Google plans to sell wireless plans to consumers or when the service would launch are not available. The firm already provides ultra-fast Internet and cable TV service directly to homes, but the Google Fiber service is only available in parts of Kansas City, Kansas; Kansas City, Missouri; Provo, Utah; and Austin, Texas to date.
The company’s plan to move into the wireless Internet market involves purchasing access to the networks of Sprint and T-Mobile through a mobile virtual network operator (MVNO) agreement.
Analysts have noted that the move is a calculated risk by Sprint, the nation’s third largest wireless carrier, and T-Mobile, the fourth largest provider. While leasing network space to Google will increase their revenue, it also creates a significant new competitive threat. The WSJ sources noted that Sprint’s decision to work with Google was approved by the firm’s chairman, SoftBank Corp. chief Masayoshi Son.
T-Mobile has taken several steps to shake up the wireless industry over the last year or so by slashing prices and introducing new service plans. That has led industry giants Verizon Communications and AT&T Inc. to match some of the new features to avoid losing customers.