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Google as a mobile carrier, revisited: Here’s what its network could look like

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Every year or so we see a report emerge claiming Google(s goog) is contemplating life as a mobile carrier, pitting itself against Verizon(s vz) and AT&T(s t) with its own voice and mobile data plans. So far nothing has come of them, but on Thursday a new report published on The Information (subscription required) maintains Google is once again bandying the idea about, though as per usual the sources are all unnamed.

I’m still very skeptical that Google really wants to deal with the expense and grief of being a mobile operator; when was the last time you had a positive thing to say about your operator? But in the last few years Google has demonstrated that it views connectivity as a crucial element to its business.

As is the case with Google Fiber, Project Loon, its work with white spaces broadband and even its investment in satellite broadband provider O3B, Google seems plenty willing to supply broadband where it feels the telecom industry is dragging its heels.

A Project Loon test flight (source: Google)
A Project Loon test flight (source: Google)

But even though the mobile operators are rolling out LTE networks all over the country, getting a resilient and consistent 4G connection still isn’t an automatic and the cost of that connectivity is still high. Maybe Google figures it can do better. And its experimentation with different wireless technologies show that it wouldn’t necessarily have to become a full-fledged mobile operator — erecting towers and buying spectrum — to pull it off.

Networks: To own or not to own?

The Information reported that Google seems to be considering two options: becoming a mobile virtual network operator (MVNO) buying voice and data airtime on another carrier’s network (the report stated Google has talked to both Verizon(s vz) and Sprint(s s)), or it could build its own infrastructure, leaning on its own fiber infrastructure and Wi-Fi.

The first possibility seems a bit far-fetched. If Google wanted to improve upon what the carriers are offering, simply reselling their services makes little sense. And while Google could build a kick-ass Wi-Fi network in its fiber markets, without spectrum and a cellular network of its own, it couldn’t come close to providing a truly mobile service.

Source: Thinkstock/pashalgnatov
Source: Thinkstock/pashalgnatov

There’s a third possibility, though: Google could do both.

We’re starting to see a new model emerge among competitive carriers that focuses on Wi-Fi networks first and uses cellular only to fill the coverage gaps in between. In France, Iliad’s Free Mobile is building a network of millions of Wi-Fi hotspots and femtocells on top of the gateways its residential broadband customers install in their homes. For everywhere else in between it relies on an MVNO agreement with Orange(s oran).

We’re starting to see that model appear in the U.S. as well with MVNOs like Republic Wireless and Scratch Wireless. The vast majority of mobile internet consumption is done indoors, particularly at home and work. If Google could tap that trend, it could carry the majority of its mobile data traffic over its own infrastructure and sell access relatively cheaply. It would still need to work with a mobile carrier to fill the gaps but only on a supplemental basis.

To go big, Google needs to go small

Still, why would a carrier deign to work with Google if it plans to compete against them? Google might have something it could offer in return. One of the most interesting projects that Google has in wireless — and one which has received relatively little attention — is its work with small cells.

For the last year, Google has been testing out an experimental network of the tiny base stations in Mountain View. Small cells basically insert a lot of capacity into a small area, and when clustered together they would tremendously boost the bandwidth available to all users in the area.

Small cells would add surgical capacity to the most high demand areas of the network (source: Gigaom / Rani Molla)
Small cells would add surgical capacity to the most high demand areas of the network (source: Gigaom / Rani Molla)

Google could go after new spectrum to build such a network, or it could partner with a carrier like T-Mobile(s tmus) or Sprint. Google could use their spectrum to build what it is known as heterogeneous network, which would layer dense high-capacity small cell clusters within their larger coverage-oriented macro networks.

We’ll see if anything comes of this; after all, we’ve been hearing the same rumors for years. But one thing is for certain. If Google does have ambitions of becoming a wireless carrier, it has a lot of options at its disposal.



11 Responses to “Google as a mobile carrier, revisited: Here’s what its network could look like”

  1. Gerald M Keenan

    Any one pay attention to the fact that Google is taking over all the Wifi in Starbucks shops, replacing ATT? Suddenly they have a series of hot spots in major urban centers, where many in their target audience lives.

    • Kevin Fitchard

      Hi Frank,

      Sorry to disagree, but I feel that’s exactly what I think Google won’t do. If Google does get into the mobile business — a big if — it would do so in a way that is very different from the mobile carriers. Otherwise it would just be subjecting itself to the same business the carriers face.

      Verizon is a big complex operation with huge investments in infrastructure, spectrum and brick-and-mortar retail. It’s business model is self-reinforcing. Google couldn’t go out and pay $160 billion for Verizon and then turn around and sell mobile data for $1 a gigabyte. I think if Google is thinking about mobile, it’s thinking about using technology and new ideas to subvert the carrier business model.

  2. stirpo

    These are all horrible ideas and I highly doubt Google will do ANYTHING mentioned in this article. Basically, a bunch of nonesense and bad ideas from “unnamed sources”.

  3. keninca

    Or, let’s say like in places where Google fiber is available, Google adds wi-fi access points to all of their fiber modems they have installed. It’s likely that would give them a wi-fi network with coverage that would rival LTE and throughput that would exceed it. And a huge user base that only needs to sign up for free.

    At least that’s what I would do if I owned a network like google fiber. Or even one of the twisted copper pair networks that ATT and VZ want to abandon.

    • Tim F.

      Someone doesn’t understand the congestion and interference issues of present day wi-fi. Not happening.

      Even with the recent improvements in small (or femto) cells… they are using unregulated spectrum. One can safely presume that as cell usage increases, there will be increased regulation of how they operate and interoperate.

      Somewhat unclear in the article, does becoming a MNVO operator allow Google to avoid becoming a telecom common carrier and thereby avoid a great deal of regulatory oversight? I presume so but am somewhat unclear on what would push them into full fledge common carrier status.

      • keninca

        Right, because wi-fi in apartment buildings does not work, when each apartment has its own AP. Nor does wi-fi work in offices, where there are lots of APs, and lots of many people sharing each AP. And all those offices, stores, and restaurants, on every city block, that have wi-fi, aren’t really working that well. Who said anything about cells?

        And are you suggesting the government is going to start regulating all of those wi-fi networks out there?