Google has taken a step closer to becoming a European MVNO (mobile virtual network operator) through a new partnership with Hong Kong's Hutchison, which will provide connectivity for customers of Project Fi -- Google's US-based MVNO -- travelling in Europe.
While details of the arrangement are thin, it may fuel speculation Google is looking to expand Project Fi to serve non-US customers, and will be viewed with trepidation by European operators already reeling from the effects of MVNO competition.
In a very brief statement, Hutchison Whampoa Ltd. (Hong Kong: 0013; Pink Sheets: HUWHY) said that Hue, its relatively new mobile virtual network enabler (or MVNE) business, would provide "international data coverage" to Project Fi customers travelling in Europe.
Light Reading had surmised that Hue could hold particular appeal for the likes of Google (Nasdaq: GOOG) and Apple Inc. (Nasdaq: AAPL) when the Hutchison business was first launched back in April 2015. (See Hutchison Courts MVNOs With Global MVNE.)
At the time, Google was reported to have been in talks with Hutchison about the formation of a multinational MVNO that would offer low-cost services to US customers travelling overseas.
Despite promising to announce partnerships with several MVNOs in 2015, Hue has kept silent about its activities since its initial launch and Google appears to be the company's first major client.
Hue is trying to differentiate itself from other MVNEs by offering a single point of contact for organizations that want to launch mobile services across a number of geographical markets -- without having to build their own networks.
Ordinarily, a prospective multinational MVNO would need to form a partnership with a network operator in each national territory, and negotiate other market and regulatory arrangements on a per-country basis, making the process costly and laborious.
Hue can support MVNOs on networks owned by Hutchison, and operated under its 3 brand, in the markets of Austria, Australia, Denmark, Hong Kong, Indonesia, Italy, Ireland, Macau, Sri Lanka, Sweden, the UK and Vietnam. Elsewhere, it says it will negotiate deals with local connectivity providers as part of its service.
That clearly appealed to Google, which has formed tie-ups with several 4G network operators in the US to support its Project Fi offering, including Sprint Corp. (NYSE: S), T-Mobile US Inc. and, most recently, US Cellular . (See US Cellular Joins Google's Project Fi.)
The search engine giant reckons it can provide much higher-quality 4G and WiFi services than other players by selecting the best network in a specific neighborhood at a particular time.
What remains unclear is whether Hue is taking a similar approach and striking deals -- on Google's behalf -- with more than one network operator per territory.
More broadly, Hue could also pose a threat to 3's retail operations by facilitating the entry of MVNOs, which have added to the competitive pressure on mobile network operators in various European markets.
In its own (similarly brief) statement on the new deal, Google said that Project Fi customers would have access to high-speed data in more than 135 "destinations" from this week.
"With the addition of Three to the Project Fi network, we're now able to deliver speeds 10-20X faster than before," said Google's statement. "And, just as before, there are no extra fees for using data internationally -- you pay the same $10/GB that you do at home."
Despite all the excitement about Google's mobile activities, Project Fi has not been without its critics. In the US, a particular gripe is that only Google's own Nexus handsets can switch seamlessly from one network to another.
— Iain Morris, , News Editor, Light Reading