T-Mobile: Google Fi Will Bring Profits, New Ideas

T-Mobile executives say the partnership with Google will be profitable and will let the two share ideas for new services and offers.

Sarah Thomas, Director, Women in Comms

April 28, 2015

3 Min Read
T-Mobile: Google Fi Will Bring Profits, New Ideas

While the big two US wireless operators may be dismissive of Google Fi's competitive threat, partner T-Mobile sees the MVNO as an exciting harbinger of things to come.

AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ)'s CFOs both recently shrugged off the threat of competition from Google (Nasdaq: GOOG)'s new wireless mobile virtual network operator (MVNO), Fi, which will offer low-cost, WiFi-plus-cellular mobile service to US consumers. (See AT&T CFO Shrugs Off Google Fi as Limited and Verizon Ready for Google MVNO Challenge.)

As its network partner, along with Sprint Corp. (NYSE: S), T-Mobile US Inc. , on the other hand, obviously sees the partnership as strategic, but the carrier's executives think allowing Google to wholesale its network will bring more than just profits for it. (See Google's WiFi-First Mobile Service 'Fi' Is Here.)

"It allows more customers on to our network on terms that are favorable to T-Mobile," T-Mobile CMO Mike Sievert said on the carrier's earnings call. "More importantly, we get to collaborate deeply with some really strong thinkers."

Sievert said that T-Mobile would make money on the relationship and be able to offer anything that proves popular on Fi to its own customers. Conversely, CTO Neville Ray stressed that T-Mobile has a lot to offer Google as well with its WiFi calling and handoff between WiFi and voice-over-LTE (VoLTE). (See T-Mobile Beats Sprint on Subs, Eyes Verizon on Network, Sprint, T-Mobile Test Ruckus's Refined VoWiFi and T-Mobile Turns Up VoLTE-to-WiFi Handoff.)

"There's R&D and capabilities they are looking to leverage from us as much as the other way, which is great to see," Ray said, adding that it will take time and "other folks" (a.k.a. Sprint) to launch VoLTE for Google to add VoLTE-to-WiFi handover to Fi. (See Sprint Plans to Meld TDD, FDD LTE Spectrum.)

Want to know more about mobile topics like VoLTE and WiFi calling? They will be some of the many topics covered at Light Reading's second Big Telecom Event on June 9-10 in Chicago. Get yourself registered today or get left behind!

T-Mobile CEO John Legere went further to note that Google Fi is starting to change the thinking about the future of the industry. "It's clear that content, social media and entertainment are all moving to the Internet, and the Internet is moving to mobile," he said. As such, more tangential players like Google will come to market, altering the landscape. When asked about consolidation amongst the wireless operators here, something Legere has always said was a matter of when and how, not if, the CEO added that it's now also a matter of whom.

"As we think ahead, I still reiterate that in five years, we'll think it comical that we thought of the industry structure as the four major wireless carriers," Legere said. He also added cable companies to the mix of content, entertainment and social companies that are all "in the same game we’re in." He expects more new entrants and more consolidation, but of a much broader set of industry players than just the big four US wireless operators. (See T-Mobile: Google & Dish Could Be 'Interesting' Partners.)

"Think of cable and other players not as competitors, but as potential partners for the future," Legere said.

— Sarah Thomas, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editorial Operations Director, Light Reading

About the Author(s)

Sarah Thomas

Director, Women in Comms

Sarah Thomas's love affair with communications began in 2003 when she bought her first cellphone, a pink RAZR, which she duly "bedazzled" with the help of superglue and her dad.

She joined the editorial staff at Light Reading in 2010 and has been covering mobile technologies ever since. Sarah got her start covering telecom in 2007 at Telephony, later Connected Planet, may it rest in peace. Her non-telecom work experience includes a brief foray into public relations at Fleishman-Hillard (her cussin' upset the clients) and a hodge-podge of internships, including spells at Ingram's (Kansas City's business magazine), American Spa magazine (where she was Chief Hot-Tub Correspondent), and the tweens' quiz bible, QuizFest, in NYC.

As Editorial Operations Director, a role she took on in January 2015, Sarah is responsible for the day-to-day management of the non-news content elements on Light Reading.

Sarah received her Bachelor's in Journalism from the University of Missouri-Columbia. She lives in Chicago with her 3DTV, her iPad and a drawer full of smartphone cords.

Away from the world of telecom journalism, Sarah likes to dabble in monster truck racing, becoming part of Team Bigfoot in 2009.

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