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Google-Dish: Perfect match or disaster in the making?

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The Wall Street Journal’s newest rumor has it that Google(s goog) is in talks with Dish Network(s dish) to launch a nationwide 4G network, using the latter’s satellite spectrum. According to the Journal, the talks are in their early stages and the newspaper’s sources don’t even know if they’ll amount to anything concrete. But it’s interesting to once again see Google’s name mentioned in another possible tie-up with a mobile operator.

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(s clwr) 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 

11 Responses to “Google-Dish: Perfect match or disaster in the making?”

  1. “but neither Google nor Dish bring expertise and infrastructure”.
    The expertise is not a problem, that can be bought. Realistically, the telco vendors they would be engaging with for this LTE network infra would be Ericsson, NSN, ALU. Those same vendors also offer Managed Services to provide full end-to-end Plan, Build, Run activities on the infra, for either their own kit or other vendors. Google would be able to buy that capability from day one, with the vendors responsible for the greenfield network deployment to accelerate the TTM for Google, as well as the ongoing network operations once the service is launched, leaving Google to focus on the customer facing aspects of the business.

    Furthermore, there would still be some mobile network expertise floating around in Google from their Motorola acquisition, so they would not be starting from zero anyway.

  2. BrianB said it right. The next $60B market is TV advertisement. You need a reasonable bandwidth 2-way channel for directing Ads to your screen. Free LTE (Fixed) in return for targeted Ads. Makes sense. Maybe even free Satellite TV.

  3. Google doesn’t have the expertise in infrastructure? Uhh, what? Have you heard of this little acquisition they made called Motorola? Google likely has as much if not more expertise than any of the big carriers. If you’re talking physically putting up towers, VZW and AT&T subcontract nearly all of their towers. If you’re talking backbone, google would again run circles around both.

  4. Tmobile seems the logical choice, considering the close relationship they’ve had on the Android front. Either that or they will do what Richard Branson did, and just make their own carrier. That’s something I would welcome, personally.

  5. As an arm chair CEO, I could see Google buying Dish to help with their Google Fiber initiative. Google Fiber will take time to build out, but with Dish customers, Google could start having benefits immediately with an established large customer base as Google Fiber grows over time. I see the spectrum as being something they would partner with Sprint or T-Mo to deploy a network in exchange for shared access.

    For Google the final frontier is TV advertising and they have only been receiving push back on that front. You either need to be a content distributor, or a cable/satelite provider to be influential. Google Fiber is a start, but perhaps Dish is a stepping stone into the TV advertising market.

  6. When carriers charge money for a few GB/month,when they try to kill net neutrality,companies like Google, Amazon , Apple, Facebook and even some of the chipmakers are forced to think about ways to eliminate those carriers.They are just keeping the industry hostage,putting the breaks on innovation and growth in the space.
    But Google can’t do it the same way carriers do it.not the infrastructure nor the business model,it’s just not worth it.So they are most likely just probing,for now,trying to find a feasible way to have a go at it.

  7. People laughed at google when they said they were going into the isp business and looked how that worked out,1 bg/s connections for $30.

    I think building a lte network from scratch has it’s advantages, one of which is no legacy cost. The big for (especially verizion) spend big bucks to maintain their 1,2 and 3g networks. A new carrier will have none of those cost so maybe they’ll be able to provide cheaper service.