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Google's Connectivity Approach to Be a Catalyst for Wireless Network Market

by Guang Yang | 3月 03, 2015

In Monday’s Mobile World Congress conference, Sundar Pichai talked something about Google’s activities on network connectivity. He confirmed that Google will launch an MVNO business in the US in coming months, and stated that “The information platform, the communication platform, and the connectivity are the three things that are foundational to us.”

Google’s movement toward MVNO business should not be a surprise to the industry, because there were several reports in last month that indicated Google will partner with Sprint and T-Mobile US for MVNO service. In fact, Google is not the first Internet giant that plans to launch an MVNO business. Alibaba in China has already launched its MVNO service in mid-2014 and has gained over 200K subscribers by EOY 2014.

Pichai said that “the core of Android is an ecosystem approach with partners.” Google does not “intend to be a carrier at scale” and is “working with existing partners.” Just like Nexus device program, the MVNO activity looks to be a small piece in Google’s entire business territory. But the small piece could play an important role in Android ecosystem. It could help to build a closed loop between Google’s core services, Google’s partners and their customers. Alibaba has been working in such way.

Ali Telecom – Alibaba’s MVNO subsidiary – has developed some innovative services, e.g. Interim Call Number, Data Volume Wallet and Tao Wi-Fi. All these services are available to any customer with a Taobao account - not necessarily an Ali Telecom subscriber. They can also help retailers on Alibaba’s e-commerce platforms to grow their businesses. When customers make purchase in Taobao or TMall shops, retailers could award customers some credits. Then customers can convert their credits to cellular data volume through Data Volume Wallet or Wi-Fi data volume through Tao Wi-Fi. These services could become promotional tools for retailers on Alibaba platforms.  Alibaba’s MVNO service could refer to our recent research insight Could Alibaba Be A Reference Model for Google's MVNO Business?.

MVNO’s innovative service model could spur MNOs to improve their services. For example, all three Chinese MNOs have launched their Data Volume Market or Data Volume Bank – similar concept with Ali Telecom’s Data Volume Wallet - to support customers sharing or exchanging their unused data volume. These platforms will be also opened to the 3rd parties to enable O2O business model. These new models of Chinese operators could refer to our report The Outlook for China's Mobile Market - Five Predictions for 2015.    

As same as Alibaba, Google can also set references and spur innovations in wireless market through its MVNO business. In the future, Google could integrate the MVNO business with other connectivity projects like Google Fiber, Loon or Titan to create new service models and new business opportunities.

As Pichai mentioned, Fiber, Loon and Titan are “three main points” to Google’s connectivity approach. These efforts will generate persistent impact on wireless network market, not only on services but also on technology side. Google’s acquisition of mmWave startup Alpental Technologies may be a sign of Google’s ambition on 5G technologies. Projects of Loon and Titan could also raise new requirements on cellular network design. It could mean a 3D network topology in radio access network with new requirements on radio resource management and network architecture (see our insightDoCoMo's 5G Trials Cover a Wide Variety of Requirements, While More Scenarios Still Emerging, e.g. Google's Project Loon).    

Therefore Google’s connectivity approach could become a catalyst to wireless network market, to spur service innovations as well as to bring new requirements for technologies. 

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