Google Enters Wireless Services – More avenues for ads?

  Jan 28, 2015 4:42:49 AM

Google is getting into the business of becoming a network carrier to start selling wireless services to customers. Business Week has reported as recently as last week that Google has reached an agreement with Sprint Corp. to use its network and operate as an MVNO (Mobile Virtual Network Operator).

How does it benefit Google? Before we try to understand this, let’s examine if this is an unusual step. Going by history, exploration into uncharted territories is nothing new to Google and this isn’t the first time they are entering into communications infrastructure business. Google is already providing internet services through their Google Fiber initiative. Not to forget their other giant and ambitious initiatives like Project Loon and Self-Driving Car.

Coming back to the subject, some possible reasons why Google is doing this:

  • To demonstrate stock Android’s adequacy for present market and the unnecessary medium to high amount of customizations that network operators demand. The line of Nexus devices is time and again substantiating this wherein OEMs are already shedding their customizations and moving towards the stock OS. This will ensure deeper penetration of pure Android and therefore Google services.
  •  Setting an example in terms of low-priced tariffs with quality services thereby pushing others to follow suite. Google is doing the same on the device side with their Android One initiative. This can lead to data services attracting more users and/or increased ARPU.
  •  Self-Driving cars are soon becoming a reality. These would largely depend on networks (for GPS tracking, data transactions) which is where Google has started laying the foundation by getting into wireless services business.
  •  A distinctive opportunity for entry into IoT that is already crowded by chip manufacturers and startups to provide wireless connectivity.

Bottom line, Google wants much more penetration of Internet and is looking for ways to reach the consumer directly.

With Android being safely positioned as the leading smartphone OS, can this wireless service provide Google a greater control on the fast-growing mobile and IoT segments? Since most of Google’s revenues come from search and advertisements, could this entry into wireless services pave way for a new medium of pushing ads?

Whatsoever is the reason, the future holds an exciting journey wherein Google is headed towards disrupting another business stream.

Reference: http://www.businessweek.com/news/2015-01-22/google-reaches-deal-with-sprint-to-sell-wireless-service

Author: Raghavendra Rayadurga - Technical Architect,  ERnD Practice

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