People who travel outside the U.S. often see their mobile phone bills take a huge jump. This is because most carriers have arrangements with local carriers abroad to gain wholesale access to their networks. Naturally, the added cost finds its way into your bill at the end of the month. The major part of the cost is generally seen in your data plan which gets used every time you access the Internet.
Google (News - Alert) is trying to change that concept by offering its own international call and data plans. What makes Google’s plan unique is that it would offer its customers international calls, text and data at the same price regardless of whether you are in the U.S. or abroad.
The company is currently in talks with Hutchison Whampoa Limited with the hopes of reaching a wholesale agreement in which Google will use its network to deliver the services. Hutchison Whampoa Limited is an investment holding company based in Hong Kong. It is one of the largest companies listed on the Hong Kong Stock Exchange. The company is an international corporation with a diverse array of holdings which includes the world's biggest port and telecommunication operations in 14 countries and runs under the Three brand.
Three has 22 million customers in Europe alone, with an international network that includes the U.K., Hong Kong, Australia, and Sweden. By linking up with Hutchison, Google could gain wholesale access to mobile service in the U.K., Ireland, Italy, along with several other countries where the company owns mobile networks.
It appears that Europe is already in the process of eliminating roaming charges, which means that Hutchison Whampoa would seem to make a good partner for Google. Plans to launch a mobile network were initially announced by Google last month when Google product chief, Sundar Pichai described it as a smaller scale operation which was set to launch in the coming months.
According to both the Wall Street Journal and the Washington Post, Google's advantage would be using its Internet tech to get the most efficient signal between wireless and Wi-Fi that would reduce its price tiers. Google’s mobile phone plan will most likely take the form of a virtualized network running on top of service from Sprint and T-Mobile (News - Alert) in the U.S. Initially it will be available only on the Nexus 6 here in America.
Mobile operators are already feeling some heat from companies that are offering Voice over IP (VoIP). In addition, if Apple’s (News - Alert) attempts to do away with SIM cards and replace them with software that allows iPad owners to select any available network, it could weaken relationships between mobile operators and customers.
One thought is that Google could use this project as a way to encourage operators to invest in new technology to improve mobile coverage via Wi-Fi networks. Google has adopted a similar strategy in the U.S. fixed-line telecoms market with Google Fiber. This is a project to build fiber optic networks in cities where there has been a lack of investment in Internet infrastructure. You may recall that Google has been toying with the idea of using blimps, balloons and satellite links to establish Internet connections in rural and emerging markets.