Google Signs Deal with Sprint and T-Mobile to Step Out as Wireless Carrier

by Istvan Fekete on January 22, 2015

Google has inked deals with Sprint and T-Mobile to become a wireless service reseller (or mobile virtual network operator – MVNO) in the US, reports the Wall Street Journal and The Information. At this point, it isn’t clear how much the search giant will charge for wireless services or how wide its coverage will be. Rumour has it that Google will limit the service to certain US cities or users of its Google Fiber broadband Internet service.

Sprint and T-Mobile are major players in the US mobile landscape, ranking third and fourth, respectively. Under the separate deals inked with these carriers, Google will resell services on the Sprint and T-Mobile networks under their own brand names, sources familiar with the matter have revealed.

After T-Mobile’s Un-carrier plans disrupted the mobile industry, Google has come in with ambitious plans that point beyond the popular YouTube and Gmail services. By stepping into the wireless industry, Google will definitively cause a headache for many players.

While MVNOs have so far had little success in Canada, Google may succeed in the US, and here is why: The four major wireless carriers are AT&T, Verizon, Sprint, and T-Mobile, all of whom have developed their own networks. Interestingly though, Tracfone Wireless, a unit of Mexican carrier America Movil, has grown to become the fifth-largest carrier in the US by chasing the MVNO business model of offering cheap services carried on other companies’ networks.

Fact is, Google has been quietly working on these plans for at least 18 months – since the discussions with Sprint started. The search giant already has a strong position in the mobile market through its Android software (more than half of the smartphones sold in the US are running Android), so the company will need to be cautious not to screw its ties with carriers when launching its own wireless service.

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Written by: Istvan Fekete. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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