It's official. In a speech Monday at the Mobile World Congress, Sundar Pichai, a Google senior vice president, confirmed the months-old rumors: The Internet giant is getting into the wireless network business. But only in what he called a "very small-scale" way.
"They don’t plan on really setting up a service that will go directly head-to-head with the two that dominate the market, AT&T and Verizon," says Gartner analyst Bill Menezes. Instead of building its own cell-phone towers, Google plans to choose certain locations to set up a "mobile virtual network operator (MVNO)"—a kind of middleman that buys and repackages access to data, texting and phone calls from the big wireless-network providers.
There are many MVNOs already in the market. Scott Allan, director of Ting — an MVNO that works with Sprint — says his company's innovation is flexible billing. Ting charges less when customers use less data.
It remains to be seen what Google's product will look like, but Ben Schachter, Internet analyst at Macquarie, believes the company will focus on pushing more people online.
"At the end of the day, who benefits from that? Google," says Gartner's Menezes. "Because all those people are using search, accessing YouTube, using Google docs, and so on."
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