Google's Reported Play For Wireless Services Has Channel Partners Scratching Their Heads

Google is reportedly looking to shake up the wireless carrier market with a new mobile phone plan that would rely on cellular connections provided by Sprint. and T-Mobile, along with Wi-Fi hot spots, letting users choose the best signal.

Google partners, for their part, say the move raises serious questions about how the new service would fit into the search engine giant's other productivity and cloud offerings.

Dave Monk, CEO of Berkeley, Calif.-based Google partner ArcSource Consulting, said he didn't expect to see any impact on his business.

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"I have no sense of where this would fit into Google's channels or its reseller program," he said. "I don't see any impact because it's hard for resellers to do much in the carrier service right now. ... everything is direct pay for the carrier. And most of my clients do not buy corporate phones."

Monk said Google's move may be a way to control the quality of data flowing through its Android devices in general, but he could not wrap his head around why the company would choose wireless providers T-Mobile and Sprint for cellular connections.

"I'm surprised by the carriers they're picking to partner with…. I would never consider buying that service if it's based on T-Mobile and Sprint," he said.

Last week, technology publication The Information first reported that Google was selecting connections from providers like Sprint and T-Mobile, placing pressure on the already competitive wireless industry. According to The Information, Google's offering would likely be nationwide and would begin this upcoming year.

When asked about the rumors of Google's wireless ambitions during the Mountain View, Calif.-based company's Thursday afternoon earnings call, Google CFO Patrick Pichette wouldn't comment.

Allen Falcon, CEO of Cumulus Global, a Westborough, Mass.-based Google partner, also said the wireless services play probably wouldn't impact him as a solution provider, but said the move was "interesting" and evoked memories of Google's former mobile strategies.

"I think it's an interesting move on Google's part," he said. "Google appears to be partnering with existing carriers and I suspect they're trying to move the market. It seems similar to when they released the Nexus. ... It's like a 'if you can't beat them, join them' type of strategy. I'm wondering if they're trying to do the same with wireless."

NEXT: Analyst: Wireless Services Move Has Pros And Cons

Analyst Charles King of market research firm Pund-IT, said he expects that Google was able to cut more attractive deals with Sprint and T-Mobile than larger players such as Verizon Communications and AT&T. He stressed that Google's move would throw a wrench into the already hyper-competitive wireless company market space.

"I don't think the company stands to lose much by doing so," said King. "Though Verizon and AT&T boast larger coverage areas than Sprint and T-Mobile, all four are about equal when it comes to key urban and suburban markets."

King agreed that the play was interesting and had several benefits, adding that Google may be playing a classic "follow the money" strategy.

"The massive uptake of mobile Internet usage continues with little suggestion of slowing, and while Google has been active in certain parts of the market -- with mobile advertising, Android and its own Nexus smartphones -- it seems to believe that it has the wherewithal to create a differentiated, competitive service," he said. "The company's brand is so well known and its Internet footprint so large that I expect that's true."

Business logistics could be a big drawback, however. King said Google has never been terribly sentimental when it comes to discontinuing under-performing businesses, but halting a cellphone service, along with all the customers it carries, could "give the company a real black eye."

King stressed that Google's move could open up ideas for other companies to become wireless carriers, or at least to mix up their wireless strategies and contracts.

"If Google's efforts succeed, it could provide a real shot in the arm for its preferred partners," he said. "But, if that's the case, it wouldn't be surprising for Verizon and AT&T to try to strike their own deals with Google, much as other carriers did with Apple after the company's exclusive iPhone contract with AT&T concluded."

PUBLISHED JAN. 30, 2015