It was rumoured that Apple toyed around with the idea of buying a network before releasing the iPhone. While it didn’t come to fruition, it wasn't a bad idea. The infrastructure at the time couldn't handle mobile data like the iPhone was going to need when it was released. I see striking parallels between that situation and the one Google is in now. Its needs and aspirations far outpace what the current market allows. (This time it's less a technical issue and more one of Telecoms being greedy bastards trying to squeeze every penny they can out of customers.) Googles’ business is the internet and the less people who have slow internet or small data caps the more money they can make. Cost is a factor of course but we have already seen that Google can offer gigabit connections for a very reasonable price with Google Fiber. In the cities have Fiber the other home internet companies are forced to actually provide decent service at a reasonable price. If Google bought, or started, a telecommunications company they would force the competition to become more customer friendly and offer lower prices. Google wins even if customers don’t flock to the new service. This would increase the amount of money Google makes from ads. To be clear I do think it could be a lucrative move for Google but that is not why they need to do this. Google wants to change the world and that could happen much faster if everyone had plentiful, fast, and cheap internet. They could advance technology so much faster if they didn’t have to worry about the bottleneck of the internet service providers. Let’s look at some Google products:
- Android phones all require data plans. If people aren’t using features because of data caps it diminishes the whole experience for them.
- Chromebooks are basically a web browser that require an internet connection to do anything. (Not exactly true but true enough.)
- Google Drive offers tons of cloud storage for very cheap (1TB of storage is about $100 a year) but a terabyte of storage is useless unless users can access their files quickly and without limits.
- Autonomous cars will change civilization but they will need a fast internet connection without a data cap.
- All of Googles apps are internet centric.
- Android TV aims to stream all video content to the TV. That is a lot of bandwidth.
- Google Play could see increased sales if people weren’t worried about data caps and everything downloaded faster.
All of this traffic is going over the telecoms pipes and it's these pipes that are really slowing down Googles aspirations.
Google doesn't have as much money as Apple but they could buy a smaller carrier and then pump a bunch of money into it to widely expand. This would have a few advantages.
- They could abolish data caps. The more customers who rely on the internet the more money for Google.
- They could have a new large income stream from mobile phone plans.
- They could have a wider channel for stock Android devices. Which means they control the experience more. (Their phones could be bloat-ware free.)
- They could enact their visions faster. This would give them them a customer base with enough people that their amazing ideas could be put into effect much quicker.
- They could charge one fee to connect all of a customers devices to the internet. (No separate data buckets for their tablet/Chromebook/autonomous car.) Which would encourage people to buy more LTE enabled devices.
- They would have a concrete advantage over Apple. By owning the network they could tailor it to their needs and if the data plans were cheaper it would just be one more thing Apple couldn't compete with.
The downside would be that this would piss off other carriers. Which could be disastrous off the start. Google would have to partner with other companies to provide coverage in areas where they didn’t have towers. The other companies could make the speeds incredibly slow when customers were pulling off the competitions towers. The competition would probably not have a problem selling Android because it is the only platform they can pack with bloatware but a bigger problem would be with the OEM’s who partner with the telecoms. The telecoms could put pressure on Samsung and others to not sell their flagship phones in Googles’ physical and online locations. The first couple years would be very hard and very expensive but ultimately it may be the best thing Google could do for itself.
If you’re not aware, the FCC is a bunch of spineless corporate owned idiots who threaten to stall innovation and the United States dominance over the internet by abolishing Net Neutrality. If you don’t know Net Neutrality it is the law that says all data on the internet is equal. ISP’s can’t charge a company to receive faster speeds than their competition which is good for everyone. However the FCC just voted against Net Neutrality and came up with a “fast lanes” proposal that they say won’t allow ISP’s to slow any site who doesn’t pay to a crawl. What is really going to happen is that any site not paying to be in the “fast lane” will be so slow people will stop using it. Google has fought for Net Neutrality and could offer it on its network. Why would they do this when they could pay to be in the “fast lane”? Simple, Google buys a lot of companies/start ups. These companies may not be able to gain user traction if Net Neutrality is lost. These companies strengthen Googles’ dominance and if these start ups don’t exist Google loses.
Google relies on the internet to make money and with the current state of internet, in the States, it may have to take drastic steps to protect its business. By becoming a Telecom it could not only ensure its ad business remains insanely profitable but allow them to truly change the world.