Yahoo Finance Google to launch new wireless service: Report
Google (GOOGL) is reportedly preparing to launch a new U.S. wireless phone service as soon as today, and would charge users only for the amount of data they use.
The service will piggyback on the networks of both Sprint (S) and T-Mobile (TMUS), according to the Wall Street Journal. In the first stages of the launch, the wireless service will only work with Google’s Nexus 6 phones, which have the capability to switch between the two carrier’s networks depending on signal strength. Google’s plan will also let users make calls using Wi-Fi networks.
At the Mobile World Congress in Barcelona last March, Google’s senior vice president of products, Sundar Pichai, said the service would be on a limited scale.
“We want to be able to experiment along those lines, that’s the concept,” he said. “We don’t intend to be a network operator at scale.”
Related: Google's wireless service won't take on Verizon and AT&T
Yahoo Columnist Rick Newman thinks Google's move into wireless service could benefit customers by putting pressure on the industry's business model.
"There have been instances in the past where Google has gotten involved in something...and demonstrated that you can do this in a different way," he says. "With broadband they said 'We can offer much higher speeds to consumers, if only in a couple markets,' and that has forced the competitors to say 'Maybe we better do it too.' So probably this is good news for consumers."
Google's foray into broadband service, called Google Fiber, is only available in eight cities. It offers speeds that are up to 100 times faster than other providers, which has prompted AT&T (T) to match Google’s speeds and price.
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Newman adds that major changes in wireless pricing plans are unlikely anytime soon.
"It's just like cable in a way," he says. "Consumers have been captive to the big companies offering a service for a long time, so I'm not sure we're going to get a la carte data pricing or use pay-as-you-go, but that's where Google wants to drive it."
