Google has been the talk of the telecoms industry over the last couple of days as images were released on a Spanish website of a Google SIM card connected to an Android device and a network called Google_Es. This sparked major speculation that Google is to become a Mobile Virtual Network Operator (MVNO).
Some believe the images are real and this is just the type of innovative move Google would make, whilst others are calling it a hoax. Either way, what’s all the fuss about? Here I give a brief overview of the topline advantages and disadvantages of Google moving into this space.
Dominating the mobile experience and undercutting existing mobile operators
Recent research from analyst house IDC reveals that Android is set to cover over 39 per cent of the global smartphone market in 2011 - a jump from a 23 per cent share in 2010.
The increased popularity of Google’s operating system in conjunction with the recent acquisition of hardware manufacturer Motorola mobility, its heavy focus Google Wallet and its existing propositions such as Google Voice shows that Google’s mobile credentials are strong.
Adding to this existing mobile offering by becoming a MVNO, an operator that strikes up a deal with traditional mobile operators to essentially ‘borrow’ part of their local operator waves, in some ways, feels like a natural progressive step – but a step that makes the telecom industry extremely nervous nonetheless.
One of the advantages of becoming ubiquitous on the mobile is that you have the freedom to disrupt existing business models. The fear amongst traditional mobile operators is that Google would take advantage of its position and slash data plans to attract more custom.
Increased competition and consumer privacy
This may not be good news for the operators but it would certainly provide consumers with more choice and force of the hand of incumbents to come up with innovative offerings in response to this disruptive service.
But is a Google dominated web and mobile what consumers really want? Buying a ‘Google’ mobile will give Google even more access to consumers’ behaviour.
Handing over so much control and intelligence to one company may go against Google and further fuel consumer perception that Google is fast becoming a large organisation that knows far too much about individuals.
Google becoming a MVNO has certainly been food for thought for operators and the wider industry recently but it is worth remembering that until Google confirms or denies this story – it is all just a bunch of rumours.