Google’s Call Can’t Be Ignored by Wireless Investors

[Commentary] Google, which makes the bulk of its money from online advertising, benefits from anything that lowers barriers to Internet access. And, unlike traditional carriers or even the Google Fiber offering, the company won’t need to worry about making a return on billions of dollars of network assets. Indeed, it might not even need to turn a profit in wireless to accomplish its broader goals.

The implication is that Google could significantly undercut existing wireless carriers on pricing, particularly if it were able to shift a good portion of data usage on to Wi-Fi networks, says Craig Moffett, an analyst with MoffettNathanson. There seems little doubt that the entire industry would be better off without Google’s presence. So why are Sprint and T-Mobile apparently agreeing to partner with it? This looks like a classic prisoner’s dilemma: Sprint and T-Mobile are each pushed toward inking a deal, despite the risk to the overall industry, out of fear that its rival would beat it to the punch if it balks. If T-Mobile’s recent subscriber gains are any indication, though, price is a powerful card to play. For wireless carriers, Google’s entrance to the game is the last thing they need.