The end of the year is the time when people feel more free to make wacky statements and dubious predictions. Whether it’s the season, too many rich desserts or the additional alcohol people consume it’s not clear. But one such prediction is that Google might seek to become a full-fledged phone company in 2011.
Having just gotten off one of those dreary customer service calls with my mobile carrier (seeking to remove some bogus charges from my bill) I’d actually love to see Google really shake things up in carrierland. It would be a bit of the old Google. But it’s unlikely to happen.
The CNNMoney writer who speculates about Google’s move into potential telcohood pulls together a range of past and present information to argue that Google has the capability and potentially the infrastructure to become a phone company. Google has Android and Google Voice; they’ve flirted with selling phones directly to the public (Nexus One) and they’re allegedly buying up “dark fiber.” They also bid (unsuccessfully) in the FCC’s 700 MHz spectrum auction two years ago.
Yes there are a lot of pieces of the puzzle here but many are still missing.
In order for Google to try and hold itself out as a mobile carrier it would need a great deal more infrastructure than it has. And not just towers or fiber; it would also need a customer service and billing infrastructure.
That’s not impossible to put together, especially with outsourced call centers for hire and the web for self service. But it’s unlikely that Google wants to get involved with the customer service headaches and challenges that come with being a carrier.
But to indulge the idea a bit, Google could become an “MVNO” and buy wholesale access to Sprint’s network in the US for example. There are a number of historical examples of this — though many have ultimately failed (e.g., Disney, ESPN). It was the way VirginMobile operated in this country before Sprint bought the company’s US operation.
Google could also follow Virgin’s customer service model; the company operates a call center out of Nicaragua, which provides mediocre customer care but must be relatively cheap to operate.
Yet Google’s very mixed experience with selling the Nexus One directly to the public and the generally negative reaction the initiative received from partners caused the company to reconsider the direct channel. Google wants direct consumer relationships but it needs carrier partners and has seemingly learned the lesson of being too audacious with the Nexus One.
If Google were to announce a bona fide intention to be a carrier it would likely further ruffle telco features and could damage Android’s standing. Separately, success might be very elusive for many reasons.
Google would need to offer some very aggressive discounts in order to attract customers who might otherwise be reluctant to abandon their known carrier experience (and contracts) for one largely unknown. But it’s a testament to the strength of the Google brand and reach that we can have a relatively serious conversation about the issue of Google becoming a carrier.
Perhaps the bottom line is that Google doesn’t need to become a carrier to achieve its mobile objectives. It’s so far brilliantly doing that by simply making Android available to OEMs and their carrier partners.
In fairness to the CNNMoney writer Google is as much of a telco today as Skype is, albeit with fewer users. Thus Google will probably need to make a decision in 2011 about how far it wants to push Google Voice and to what end?
I’d love to see a Google-branded mobile service — to inject more competition into the market around rates and plans. I just don’t think the logic or the will is there to make it happen.