Google reportedly is considering becoming a full-fledged mobile service provider in the U.S. market, entering the market as a mobile virtual network operator. The rumor is not new. Google has been looking at becoming a mobile ISP for some time.
Google might arguably have been motivated to launch Google Fiber to create widespread pressure on other leading Internet service providers to up their speeds.
The move into mobile likely has several strategic drivers. Google has to transition to a new role in mobility as the value of its traditional search business is pressured by mobile alternatives for its traditional search-driven advertising business.
That might account for the move into mobile operating systems, devices and apps.
But Google also benefits from lower Internet access prices, and might believe its own entry could help drive down mobile Internet access price.
Following Google's launch of Google Fiber, and its $1 billion investment in SpaceX to support the creation of a huge fleet of low earth orbit satellites to provide Internet access, the move would highlight the increasingly porous boundaries between Internet ecosystem providers, with most of the move into adjacenies happening on the part of application providers.
That is characteristic of newly-competitive markets and also of mature markets, as contestants either move to secure adjacencies. Sometimes that is to enhance the core value of the core role, and sometimes is driven by a need to create new revenue streams that compensate for revenue losses in the core business.
The boundaries between ecosystem participants tend to become more porous as competition increases. That is why app providers become access providers, or app proviers become device suppliers. In other cases, device suppliers become app providers.
In other cases video content suppliers become voice and data providers, while voice and data providers become video entertainment suppliers. We sometimes forget that for the better part of two decades, Internet service providers have worried that firms such as Google, Facebook or Amazon might beome access service providers.
That fear already has proven justified. Google Voice, then Google Fiber, and now perhaps Google mobile are initiatives undertaken by Google to directly compete with former partners in the ecosystem, even if the partnerships are functional, and not strictly based on contractural relationships.
Wednesday, January 21, 2015
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