Google’s Threat to Telecom Market
Google is expanding its telecommunication business into LTE from free voice and video calls, mobile virtual network operator (MVNO) services and wi-fi mobile virtual network operators. These moves of Google are making world mobile phone service operators tense.
According to foreign media including Bloomberg on August 28, recently Google brought in Tom Moore, founder of a satellite telecommunication operator Wild Blue, as a vice president of Alphabet, the holding company of Google. Moore will work on the commercialization of “Loon Project,” a wireless wi-fi service based on air balloons via Google’s secret project group “X.” In particular, Moore was assigned to commercializing a wide array of Google’s various projects including the Loon Project that can be offered for reasonable prices.
Google is changing other telecommunication services based on profitability and popularity. Google decided to halve the structure of the Google Fiber Project, a wired high-speed internet service and of drawing five million subscribers in five years in 2012. But now, its subscribers number only 200,000, showing a bright beginning and dull finish. Instead, Google is planning to achieve profitability by linking wi-fi repeaters to Google’s current fiber telecommunication networks and offering low-priced telecommunication services to users.
Moreover, Google is revealing its ambition about the LTE mobile telecommunication service. With six companies including Intel, Nokia, Qualcomm and Ruckus Wireless, Google formed an alliance that utilizes the 3.5 GHz band that the US government opened free of charge for an LTE service. According to foreign news wire services, Google is expected to develop a new LTE wireless service in connection with wi-fi networks.
Last year, Google teamed up with T Mobile and Sprint in the US and launched the Project Fi, an MVNO service which offers unlimited use of texts and voice calls for 20 dollars a month. In addition to Google Voice, a free voice call service, lately “Google Duo,” a free video phone call service is taking the mobile world by storm, while standing high in the application standings in the Android app market in one week after its release.
It is said that these investments by Google aim to enhance its power of negotiation with current mobile service operators. The Obama Administration surely protected internet contents and platform operators under the principle of network neutrality. But it is forecast that political changes will not be able to guarantee their futures. Analysts say that Google’s moves were orchestrated to do away with future telecommunication infrastructure uncertainties while creating a whole ecosystem of Contents (C), Platform (P), Network (N) and Devices (D), which are cores of the ICT industry, with Google at the center.
Google’s wireless telecommunication moves should be seen from two aspects," said Professor Kim Seong-cheol of media study at Korea Univ. “Its biggest goal In the US is to put a pressure on mobile service operators. For the underdeveloped countries, Google will directly invest in telecommunication infrastructure to build a way for selling internet contents and platform services which are cash cows for Google. On the other hand, some foreign media such as the Wall Street Journal analyzed that free and low-priced Google services will be the search giant’s misstep as they wind up fruitless, triggering excessive investment.