With the right strategy of VoIP and Wi-Fi, Google is set to threaten mobile operators’ voice revenues

Visiongain: With the right strategy of VoIP and Wi-Fi, Google is set to threaten mobile operators’ voice revenues

Internet search giant Google will increasingly pose a threat to US mobile operators by offering free wireless connection, supported by location based advertising in major US cities. Moreover, Google is set to become a major player in the mobile search market, continuing its current strategy of partnerships with operators and manufacturers.

The recently announced dual bid with Earthlink to provide wireless coverage for San Francisco will prove a testing ground for Google to assess whether location based advertising over free wireless is a profitable business model. Google will provide a service with speeds of around 300Kbps for free with locally targeted advertising, an advancement of the company’s current successful business strategy, whilst Earthlink will provide 1Mbps access for a monthly fee of $20. If successful, Google will be able to provide access to its free VoIP, email packages as well as internet browsing, amongst other services, to major US areas by 2008.

With sufficient potential to expand operations throughout the US and into Europe, Google could become one of the first Wireless Virtual Network Operators, presenting a significant threat to the traditional voice business of cellular/mobile operators.

The argument that Wi-Fi and cellular are complimentary rather than competitive depends on who is operating the service. Google’s successful advertising based business model allows the company to offer services for free. If it can convert this business model to include local based advertising to Wi-Fi users, it poses a significant threat to mobile operators,”

By providing free wireless networks, Google can attract new users whilst keeping existing users on Google for longer. Targeting wireless users with local adverts will aid future revenue growth.

The study also found that Google is aggressively pursuing the mobile search market. The company has already partnered with Motorola, Sony Ericsson, BenQ-Siemens, T-Mobile and Vodafone to provide mobile internet search facilities. Google will continue to partner with operators and manufacturers whilst improving its own mobile offering. Many of Google’s desktop-based services, such as email, calendar services and local services, are transferable to mobile and will be introduced to Google’s mobile package through to 2008. Google in mobile and wireless: Analysing the impact and assessing the threat of the search giant's market entry Publ 20060508