The rumor mill is spinning talks that the world’s No.1 search engine may be adding mobile carrier to its vast tech offerings. Google already has Google Voice, which allows people to call each other through Gmail or Hangouts with a Google phone number. They also create the most used mobile software, design and sell phones online, and provide Internet service through Google Fiber. Mobile phone service only seems like the next natural step.
“Rather than spending the tens of billions of dollars it would cost to create a wireless network, Google reportedly will carry its service over Sprint (S) and T-Mobile’s (TMUS) networks,” reports Money.CNN.com. The mega company is said to pay the carriers $2 a gigabyte, according to Macquarie Securities analyst Kevin Smithen, which means Verizon and AT&T will have to stand against some strong competition.
The potential competition is a win for T-Mobile and Sprint, but they are still approaching the deal with caution. According to the Wall Street Journal, “Sprint worked a usage cap into its contract with Google that would allow the wireless company to renegotiate its deal if Google signs up a ton of customers,” as reported on Money.CNN.COM. Smithen predicts that in 2018, Google will pay Sprint $750 million and $250 million to T-Mobile for its service. This means that if Google chooses to break even, it could sell $1 billion in wireless services in as short as three years from now.
If Google is successful, it could influence Apple to start selling its own wireless service with each iPhone purchase. There is a downside, however, to the alleged big move. In the inevitable events that service and connections are disrupted, customers will not turn to Sprint or T-Mobile for answers, but instead blame Google.