Google is ready to unveil its own wireless service, which could happen as soon as Wednesday, April 22, according to a new report.
The Wall Street Journal cites people familiar with the matter who say that Google is all set to launch its new usage-based wireless service. Unlike the wireless data plans offered by the Big Four carriers, Google will charge users only for the amount of data they actually use. If the device is connected to a Wi-Fi network, Google will route calls and data to Wi-Fi to further reduce the use of more expensive cellular signals and help customers save up on data costs.
Currently, Verizon, AT&T, Sprint, and T-Mobile offer wireless data plans that charge customers a fixed amount for a certain amount of data that many customers end up not using at the end of the month. A survey by mobile intelligence firm Validas says customers, on average, lost $28 a month on unused data, although AT&T and T-Mobile are now allowing users to roll over unused data for the following month.
For now, only users of the Nexus 6 will be able to use Google's service. Google does not have a network of its own just yet. The Internet company has struck a mobile virtual network operator (MVNO) deal with Sprint and T-Mobile to resell their wireless services and let the two carriers carry Google's traffic over their own networks, albeit reluctantly for Sprint, whose decision to join the agreement went all the way up to Masayoshi Son, CEO of Sprint owner Softbank. The Journal's sources say Google's service will dynamically switch between Sprint and T-Mobile's network, depending on which network has the strongest signal at the moment.
Google doesn't interpret its entry into the wireless industry as a threat to the Big Four carriers. In fact, Google was only able to convince Sprint into the agreement when it agreed to subscriber limits that would allow Sprint and T-Mobile to renegotiate their MVNO agreement if Google's service becomes too large. And when Google senior vice president for Android, Chrome, and Google Apps Sundar Pichai introduced Google's wireless plans in Barcelona, Spain last month, he said the service was going to be a small-scale experiment that is intended to explore new pricing strategies and encourage carriers to follow suit.
Still, Google's broadband Internet service Google Fiber, which offers broadband service 100 times faster than the national average, is also small scale in that it is only offered in a handful of metropolitan areas in the U.S. Despite Fiber's developmental nature, it has already prompted traditional broadband providers such as Comcast and AT&T to amp up their offerings to the same 1-Gbps that Fiber offers.
"While Google may not be targeting huge numbers of subscribers, their entry into this market is very important because it has the potential to disrupt the wireless industry in much the same way Google Fiber prompted changes in the cable and broadband industries," Rajeev Chand, head of research at investment bank Rutberg & Company, says.
