Hold The Hype: Google’s MVNO & The Nexus 6
Earlier this week, the Wall Street Journal set the internet abuzz with reports that the Nexus 6 will be the sole device supported by the new mobile network Google is set to launch in the coming weeks. The ensuing re-posts and speculation seized on the notion of an ultra-exclusive carrier, but what do we know for certain, which parts are still speculative, and does any of the speculation ring true? Let’s take a closer look at Google’s rumored network to unpack the hype.
Back in January, reporters at the Wall Street Journal and The Information ran features about the search giant joining the ranks of Boost Mobile and TracFone as a Mobile Virtual Network Operator (MVNO) – a reseller of someone else’s service who makes money through inventive and usually low-cost pricing schemes. In this case, the backing carriers are rumored to be T-Mobile, Sprint, and the WiFi at your neighborhood coffee shop (or anywhere else, for that matter).
In the past, these virtual carriers suffered from a bad rep as offering “inferior” coverage to those unable to afford traditional plans from the big four, but these days many MVNOs offer the same coverage and 4G data as their wholesale partners. What’s more, relative newcomers like FreedomPop and Republic Wireless lean heavily on WiFi as a way of offloading their expense to the home, office, and coffee shop hotspots you already use. As a result, plan prices are shockingly low without sacrificing too many perks.
Google’s twist to this low-cost, no-compromise tale is smart and seamless hopping between Sprint, T-Mobile, and WiFi connectivity for every call, text, and megabyte you send. From a technical standpoint, this means software and hardware to quickly swap between GSM and CDMA standards (no small feat), and a Google Voice inspired app to make the handoff to wifi when necessary. The technical specifics are still a mystery as no one has yet demoed a miraculous service trifecta like this in the open, but it’s a safe bet that Google will need tight control over both hardware and software for it to work. This is where the rumors and announcements of this past week enter the story.
Recap of Mobile World Congress & Beyond
Monday – Google exec Sundar Pichai confirms the existence of an upcoming MVNO during a fireside chat with Bloomberg at this week’s Mobile World Congress. During the chat, Pichai speaks in broad strokes about the (unnamed) project, drawing many parallels with the subdued business model of the Nexus program.
“We don’t intend to be a network operator at scale; our carrier partners are the ones who will provide services. […] Our goal here is to drive a set of innovations which we think the ecosystem should adopt, and hopefully we will get traction.”
Thursday – The Wall Street Journal cites two un-named sources who claim the Nexus 6 will be a launch device for the new network. In the same article, one of the two sources further claims the Nexus 5 won’t be along for the ride. Here’s the relevant paragraph, emphasis mine.
The service, designed to switch among Wi-Fi and cellular networks, will initially be available only on the latest Nexus 6 smartphone designed by Google and made by Motorola Mobility, a former Google unit now owned by China’s Lenovo Group Ltd. , two people familiar with the matter said. One of the people said the service won’t work with older Nexus devices, such as LG Electronics Inc. ’s Nexus 5.
These are the facts, and they are few. It’s no wonder, then, that the internet is in a tizzy with questions. Why was the Nexus 5 nixed when it has a powerful Snapdragon 800 and all the right frequency bands? Is the decision final, or just for launch? What about other capable devices like modern dual-SIM handsets; do they have compatible hardware, software, and firmware? Perhaps most importantly, what is this carrier officially called, and when can we play around with it for ourselves?
With facts neatly out of the way, let’s dive into this speculative fray and tackle the most pressing question first – could the lone source from the Wall Street Journal be right?
Argument For Nexus Exclusivity
The launch of the Samsung Galaxy Note 4 and Motorola Nexus 6 late last year marked the beginning of a new crop of superphones. Both carry Snapdragon 805 processors, a step up from last year’s Snapdragon 801 norm, and both pack a plethora of antennas including the 700 MHz Band 12 now in use by T-Mobile. However, only the Nexus 6 does all of this with a single hardware variant – the carrier-agnostic “North America” model that works on almost every network from Toronto to Tampa. In fact, the Nexus line is the only series of phones known for compatibility with both Sprint and T-Mobile, making them perfect candidates for a carrier-hopping MVNO.
Hardware and software control
Given the complexity of maintaining a signal with two networks’ towers simultaneously, it’s easy to see how low-level tweaks to hardware and software could be essential to an ambitious project like this. As such, a stripped down Android experience devoid of manufacturer skins and branding is an asset. Each layer of UI or firmware tacked on beyond AOSP is another layer to debug, and third-party features tend to be proprietary and difficult to modify at a low level. Phones in the Nexus program side-step this issue by being as close to stock as possible by design. Further, the Nexus 6 was designed under Google’s guidance by Motorola, itself a Google subsidiary at the time.
The closest carrier parallel we can draw is the wifi-first Republic Wireless, and it should be noted that only a hand-full of Motorola devices are allowed on the network. Each of these – the 1st and 2nd generations of Moto X, and the first generation of the Moto E and G – are heavily modified to seek out and connect to wifi when possible for both calls and data. Add in a tricky handoff between the dissimilar telecommunications standards of CDMA & GSM, and the need for complete device control grows even more acute.
As mentioned earlier, Sundar Pichai made it clear at the Mobile World Congress that the upcoming MVNO venture is a small-scale experiment. This idea is bolstered by the fact that Sprint is rumored to have included a volume trigger in its contract, forcing Google to renegotiate terms if the service takes off. How better to ensure the experiment stays in the minor leagues than to limit the list of supported devices?
A common criticism of this analysis is that telecom service providers need to operate at scale in order to remain profitable, thus Google is shooting itself in the foot by aiming low. This is simply not the case. The beauty of a virtual operator is that the heavy lifting of connectivity and tower maintenance is done by the backing partner network(s). The virtual operator, in turn, handles the customer end of the equation: setting plan prices, collecting payments, and fielding tech-support calls. While some carriers like Cricket make use of physical storefronts, not even this is a requirement. Ting, for example, runs its entire business from two call centers in Canada staffed by skilled techs with a no-hold phone policy. On the whole, overhead for an MVNO business is surprisingly low. Google’s track record in managing digital storefronts for physical goods is spotty at best, but they do have infrastructure in place to make the proposition work. Expect a follow-up article grading the quality of their service in practice after it goes live. The hope is that Google has picked up a thing or two from contemporaries to make customer service a pleasant experience, but even at its worst, at least the company has never landed alongside Verizon on the Consumerist’s tongue-in-cheek Worst Company In America bracket.
The Nexus line may be premium, but it squarely targets developers and tech-geeks with its word-of-mouth buzz, modification-friendly warranty, and freely available source code. In fact, a quick stroll through the XDA forums shows that despite low sales numbers overall, developers are quite taken with the latest device. These same technology trailblazers the perfect market for a new niche startup.
A Word of Caution
We are still in the early days of this story, and the only things we know for certain are that an MVNO is on its way from Google, and it will be a low-key affair. Does this mean we will need to grab the latest Nexus-branded handset to jump on board? Possibly, but only a single un-named source has offered confirmation. Will other devices work at launch or down the line? Only time will tell. In the interim, let’s cool our heals and speculate responsibly. Your next device purchase can wait another few days until Google finally gives this project an official name.
Are you looking to join Google’s MVNO on day one? Would you switch phones to do so? Let us know what you think of the hype and speculation in the comments below!