Sources have revealed that Google is engaged in talks with Hong Kong conglomerate Hutchison Whampoa, owner of U.K. wireless carrier Three, to establish a “small scale” mobile network. The network does not appear to be one that consumers could sign up for regular service, serving instead as a means for U.S. travelers to use their phones while traveling abroad without incurring expensive international charges. Ultimately the wireless service in overseas locations would be tied back to Google’s attempt to create a U.S.-based mobile network to compete with the existing major carriers.
The ability to offer international calling and data support at no-cost or at a very low cost would put Google in a position to put some pressure on U.S. carriers. Sources suggest Google is interested in driving major carriers to reduce their pricing for services so the profit margin is more in line with overseas carriers. This makes sense for Google who would want access to be as cheap as possible so as to keep more customers online using Google services.
Besides the price pressure Google may eventually bring to bear, sources think Google’s move may also put more pressure on carriers to create more extensive coverage with WiFi based hotspots. Consumers may also see more pressure on carriers to reduce or eliminate roaming charges. Three is already pushing for their elimination and it appears European regulators may be planning to address the issue as well.
source: The Telegraph