I still think the idea of Google becoming a carrier is laughable (you can read why here), but it’s looking more and more likely that Google wants to put some skin in the mobile broadband game through strategic investment. In fact it’s already done so in the past, plopping down $500 million to fund Clearwire’s WiMAX ambitions. WiMAX didn’t exactly work out – it sold its Clearwire stake this year – so now Google may be setting its sites on LTE.

Dish is a satellite communications and TV provider with a hankering to become a terrestrial mobile operator. Over the last few years it’s scooped up a bunch of satellite communications licenses that it’s asking the Federal Communications Commission to clear for LTE use. Dish claims that wants to become a legitimate contender in the 4G market and is looking for partners to help it get its LTE network off the ground – or so it claims. Dish is just as likely to flip its spectrum for a quick profit once it gets the FCC to open up its spectrum.

Assuming for the moment that Dish is sincere, however, what would a partnership with Google bring it? Obviously money: Google has deep pockets and building a network 4G network from scratch is an expensive proposition, costing the companies well upwards of $10 billion. Ideally Dish would like to partner with an entrenched mobile carrier, one that already has the core and tower infrastructure in place to host its radio network as well as the back office and customer service operations to actually run a nationwide mobile carrier.

Google has the cash and Dish has the spectrum, but neither Google nor Dish bring expertise and infrastructure, which would put both at disadvantage. They would have to start from square one, replicating what the major wireless operators have spent more than a decade building. If that sounds like a huge disadvantage, that’s because it is.

But then again Google may be looking to start from scratch. Partnering with an established mobile operator, means embracing the traditional carrier business models of expensive mobile data tiers and long-term contracts as well as a mindset still grounded in protecting old-school voice and SMS services and their revenues. There’s a reason why Google invested in Clearwire. It wanted to challenge the traditional way of selling wireless services. It may now see the same opportunity with Dish.

Dish photo courtesy of (CC BY 2.0) Flickr user 

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• 2012: Data, spectrum and the race to LTE
• A look back at mobile in Q1
• Who and what to watch in the new era of the living room

UPDATE: Sprint has confirmed in a statement that it is in talks with SoftBank about a substantial investment that could yield control to the Japanese carrier: “Although there can be no assurances that these discussions will result in any transaction or on what terms any transaction may occur, such a transaction could involve a change of control of Sprint. Sprint does not intend to comment further unless and until an agreement is reached.” (Original stories continues below)

Japanese newspaper Nikkei said that SoftBank is looking to spend more than 1.5 trillion yen ($19.2 billion) to gain two-thirds of Sprint’s stock. Another report in the Wall Street Journal, quoting a source close to the situation, said that SoftBank was willing to spend more than 1 trillion yen ($12.8 billion) to buy Sprint. Japanese broadcaster NHK also said that SoftBank was looking to buy two-thirds of Sprint at a price that could exceed 1 trillion yen. Reuters also has a similar story based on a source with “direct knowledge,” of the situation.

It’s unclear if all of these stories are being leaked by one person. The deal, if confirmed, would be another shakeup for the US cellular market after T-Mobile and MetroPCS announced their intention to merge. Sprint was seen as a potential loser in that deal. But if SoftBank buys it, it could have a better chance of competing in the US.

Softbank has been growing fast and recently purchased a smaller Japanese carrier called eAccess for $1.8 billion. It took over Vodafone’s Japan business in 2006. It is reportedly looking to use economies of scale to pay less for devices and networking equipment.

Photo courtesy of Shutterstock user Susan Law Cain

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• U.S. Wireless Data Market: Q4 and Year-End 2008
• Carrier IQ and the continued erosion of operator trust
• Sprint’s tightrope walk: finding a balance for its network modernization plan

Nikkei first broke the news Amazon would begin selling prepaid SIM cards with 500 MB of data access over NTT DoCoMo’s LTE network, The Verge reported, though, according to PC Magazine, Amazon is denying it has any MVNO plans.

Assuming the initial reports are accurate, you would think Amazon was testing the waters for a big global push into the mobile operator business. But I don’t think Amazon is interested in becoming an MVNO, for the simple reason that it already is one.

Amazon has relationships with more than one hundred operators all over the world, which deliver its e-books and other content to Kindles via their 3G networks. It’s not the traditional MVNO relationship — Amazon only charges customers for the e-book download, not a monthly subscription fee — but it’s an MVNO relationship just the same. It also happens to be the MVNO scenario that best fits Amazon’s retail business strategy.

Why content and connectivity don’t mix

Amazon is a product retailer. It wants to sell you books and music, either electronically or through mail order; it wants you to buy apps through the Amazon App Store; and it wants you to buy Kindles so it can in turn sell you more e-books and apps. All of its efforts in wireless — including developing its own Android tablet variant for the Fire — have been aimed at furthering that simple goal.

I suppose you could argue that becoming a carrier would support Amazon’s retail businesses as well, that providing access is the ideal way of steering customers to its app and content products as well as its new cloud-based services, Drive and Player. But becoming a full-fledged MVNO is a big undertaking, requiring it to set up provisioning, billing and customer-management infrastructure.

What’s more, the economics of being a carrier don’t jibe with the economics of being a retailer: In fact, the two are often working a cross-purposes. Amazon wants you to buy as many e-books and digital music tracks as possible. It doesn’t want you to hold back on your purchases for fear of exceeding your data cap. Conversely if Amazon gets into the carrier business it will have to start acting like a carrier. That means maximizing its voice and data revenues. Amazon could except its own services and purchases from its own data caps — letting that traffic ride toll-free over the network — but it’s much easier for it do so without going through the trouble of becoming a full-bore MVNO.

Why MVNO lite is a good model for Amazon

Amazon could simply extend the shadow MVNO model it currently uses for Kindle e-book downloads to its individual purchases, apps and services — no matter whose devices or networks they run over. Operators like AT&T and Verizon Wireless are floating the idea that content providers and app developers pay the network carriage charges for their customers’ mobile data consumption. This is the exact same arrangement Amazon already uses for the Kindle, and it would be one the retailer could easily extend beyond its e-reader.

And if Amazon wants to pair its future devices — whether a 3G/4G version of the Fire or a forthcoming smartphone — with wireless connectivity, it could do so easily with partnerships. Amazon already resells the major operators’ phones, tablets and service plans. It would be relatively easy for it to start offering the SIM-card-only services of T-Mobile, AT&T and international operators. If it wanted to get creative it could start selling the SIM card plans of other MVNOs such as Simple Mobile, TracFone’s Straight Talk or H2O Wireless, which offer steep voice and data discounts over the big 4.

If Amazon really feels it has a future as mobile carrier, independent of its other businesses, then more power to it. I would be very curious to see how it would innovate in the market that could frankly use a competitive kick in the pants, but I doubt that is truly Amazon’s ambition. All signs point to Amazon’s interests in wireless being ancillary to its primary digital retail mission. Going through the expense and headache of creating a new wireless MVNO merely to bolster your core business is a stupid idea, especially if a lot of people have already done the work for you.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Mobile 2012 and beyond
• The future of mobile: a segment analysis by GigaOM Pro
• CES 2012: a recap and analysis

Cricket Both operators plans to implement their its turbo buttons this year, while Verizon has not set a launch date, but they plan to position them differently. Verizon’s will be a premium service for customers looking for speeds beyond the norm, while Cricket’s will be a means for customers to reclaim their regular data speeds after customers use up their monthly gigabyte quotas and are throttled down to the equivalent of dial-up modem access. (Update: Verizon clarified to us on Monday that, contrary to earlier reports, its turbo technology is still deep in the labs, and it hasn’t settled on a timeframe for commercial release or a specific business model.) But they both accomplish the same thing: giving customers a bandwidth oomph beyond what they would get from their normal data plans.

A turbo button is an intriguing concept. Most of the data services I use on my phone – Twitter, e-mail, web browsing, Pandora — don’t require a stellar mobile broadband connection, but for some apps the network’s best effort isn’t good enough. If there is a video I’m aching to see or a big download I want to speed up, having the option to pay a few cents to a dollar for instant gratification might be worth it.

What about the other guy?

There’s a trade off. The wireless network is a shared resources, so every packet of mine that gets prioritized means someone else’s packet is getting de-prioritized. If you’re in a congested cell where a bunch of other people have temporarily turbo-charged their phones, your network connection has to make up the difference, sticking you with even slower speeds than normal.

These kind of data management policies are starting to make their way in to mobile networks and they could result in a new order of data plan tiers, based on quality of connection rather than gigabyte tonnage consumed.  Tekelec, which develops the policy management technology behind Verizon’s turbo button, believes we’re going to see a lot more ways to slice and dice data in the near future. In a recent interview with GigaOM, Tekelec CTO and VP of engineering Doug Suriano said we can expect to see operators start offering “upside down” data plans, which will allow customers to customize their plans – and the prices they pay – based on the types of applications they use and the times they typically use them.

The next type of pricing policy we’re likely to see, Suirano said, will be the opposite of a turbo button: the equivalent of a network brake. Rather than pay more money to  get temporarily faster speeds, customers may be willing to pay less money to temporarily suffer sluggish bandwidth. Customers often would enjoy the same robust speeds as their full-fare counterparts, but when the network gets congested their data traffic would be the first be deprioritized, clearing the capacity fast lanes for premium turbo subscribers, Suriano said. He used Verizon as a hypothetical example for such a service:

Verizon Wireless has a reputation for providing a quality service to all customers, so for any premium customer there will be mechanisms in the phone to ensure that you always have a ‘Verizon-quality’ experience. But if you want to pay $10 to $20 less a month for data, Verizon could offer you a service that’s good for most of the things you want to do with your phone, but doesn’t always guarantee you that Verizon level of quality.

Could prioritization be the answer to data caps?

What’s particularly interesting about such a scenario is it might revive what a practically extinct concept in mobile: the unlimited plan. While there is a set cost for to delivering any megabyte of data to a customer, the really expensive thing for an operator is to deliver a megabyte each to hundreds of customers in the same cell. It’s a matter of network scale and load balancing. If you’re wandering around the streets of your city’s financial district at 4 AM, the network is wide open, its capacity lying dormant. But at Noon that same network is overloaded.

If an operator had a way to ensure that customers’ speeds were downgraded only when other customers were vying for that same capacity, then it could open up the data spigots, offering unlimited, though restricted, access — or at least a whole bunch of gigabytes for cheap. But such a policy might produce its own problem of scale. If everyone is accessing the network all of the time, then the network is always congested and everyone’s traffic — except for that of a few premium customers — gets de-prioritized to oblivion. To make it work, operators would need to strike a delicate balance between the network capacity they can feasibly build and the way their customers access it.

Of course, any time you start talking about prioritizing certain types of traffic over others, controversy ensues. Wireless carriers may not be bound by the same net neutrality restrictions their wireline counterparts face, but that doesn’t mean they aren’t vulnerable to the ire of their customers. Preferential treatment of one person’s packets over another’s could create a stratified mobile Internet, with an upper class that’s willing to pay to access what they want, when they want and lower class left with the network’s scraps. Depending on how operators implement these new pricing policies, they could spark a revolution in the pricing and availability of mobile data or they could create data apartheid.

Speedometer image courtesy of Flickr user Nathan E Photography
Yield image courtesy of Flickr user Seth J
Buffet image courtesy of Flickr user Wesley Fryer

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Confused about the wireless markets? Here’s a breakdown
• LTE-Advanced: what it is and isn’t
• LTE changes everything; LTE changes nothing

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Mobile 2011: Data Consumption Will Explode
• Mobile 2012 and beyond
• 2012: Data, spectrum and the race to LTE