Google Inc. recently announced that it would be entering the mobile data industry soon by launching its own data service for the Nexus phones. Now, it seems the company also wishes to shake up existing data service providers in order to make room for its own data service by the end of this year.
The new service being planned by Google Inc. (NASDAQ:GOOG), for a mid-year launch this year, will sift through available connections by Sprint, T-Mobile, and other data operators in the US, in a given area, including hotspots for Wi-Fi, to assess which company is offering the best signal range. The company offering the best signal range would then be selected to route all the data services, including calls, texts, and mobile internet.
However, according to Google, the aim of this service is not to target mobile data service providers, but to provide a better service to the end user. According to a spokeswoman close to the company, the service will allow users to break the barrier that is built around them after they sign a contract with a data service provider.
Data service providers in the US bind customers in contractual agreements, under which customers are bound to pay for services every month for a time specified in the contract. These contracts make it very difficult for consumers to switch to another data service provider if their current one is not providing satisfactory services.
But Google plans to change all that. For Google, the priority is the end user, and the quality of service the he or she receives. Hence, by allowing users to switch to the network with the best signal strength at a given location, the probability of the consumer becoming dissatisfied with a service decreases, as they continue to receive high quality service, even if it is not being provided by their own data service provider.
Sprint and T-Mobile have already joined in with Google to forward this plan, according to credible sources on the internet, leaving investors baffled with the decision. Google’s plan seems detrimental to the business of mobile data service providers, and by allowing Google to provide customers with such a service (which switches a user’s data service to other networks if more qualified options become available), the companies may be digging their own graves.
However, according to analysts, the move may be beneficial for data service providers. Considering the on-going price wars, Google’s service would level the field for all mobile data service providers, filtering out those who are not providing a high quality service to consumers. Now, service providers would be compelled to focus on improving the quality of their service, maybe shift entirely to Wi-Fi based services (which is another goal for Google Inc.) if they have to in order to become the best performing network according to Google’s new plan.
Google Inc. (NASDAQ:GOOGL) is expected to launch its own mobile data service later this year, initially for Nexus devices only. The company is focused on rebuilding the way mobile internet operates, and is devising new plans and strategies to make mobile internet more accessible and cheaper for consumers.
