Reports that Sprint Corp. will help Google Inc. start selling wireless phone service directly to consumers suggest that the Overland Park-based carrier sees more rewards than risks from a deal.
Google, according to unconfirmed reports, will contract to use Sprint and T-Mobile US Inc.’s wireless networks to offer its own competing wireless service. None of the companies would comment on the published accounts in The Wall Street Journal and elsewhere.
Such a deal would bring added revenues to Sprint and give its wireless network a Google stamp of approval, said Berge Ayvazian, an industry consultant at UBM Tech.
Network rating groups routinely place Sprint fourth among the national carriers for the speed at which it delivers data, such as streaming video and downloading apps. By relying on Sprint’s network at least in part, Google would be endorsing its capabilities.
At the same time, Google would represent one more company trying to win over Sprint’s current customers, and it would be a financially strong competitor. Google would pay Sprint for the Google wireless customers that use Sprint’s network, but it would pay wholesale rates that are lower than the retail rates current Sprint customers pay.
“That’s the risk they would have to take, trading retail customers for wholesale customers,” Ayvazian said.
Google could count multiple benefits from entering the wireless market in competition with not only Sprint and T-Mobile but also AT&T and Verizon.
If everything falls into place, Google could offer discounted wireless data plans that would pressure the national carriers to offer similar deals and services or risk losing customers to a powerful rival.
For Google, more affordable wireless plans could bring more people online via their phones, which benefits Google because it runs the Internet’s dominant search engine and largest advertising network. The Mountain View, Calif.-based company would profit from a potentially larger audience for its services.
Google also implants its services in its Android mobile operating system, the mostly widely used software on smartphones.
The technology news site The Information and The Wall Street Journal each reported Google’s intention to become a wireless service provider through deals with Sprint and T-Mobile. The reports cited people familiar with the matter but did not identify them.
The Journal’s report said the Google deal was decided under former Sprint chief executive Dan Hesse, who left in August, but also carried approval from Masayoshi Son, Sprint’s chairman and the chief executive of SoftBank Corp., a Tokyo-based company that owns 80 percent of Sprint.
Sprint already provides access to its network for about 150 other companies that sell wireless service, including FreedomPop, Ting and Republic Wireless. It’s unclear how widely Google will sell wireless plans or when the service would launch.
Google could combine a mobile wireless service offering with its ultra-fast Internet and TV service called Google Fiber, which is available in the Kansas City, Provo, Utah, and Austin, Texas, areas.
Shares in Sprint closed Thursday at $4.29, down 10 cents. T-Mobile finished 42 cents higher at $30.50, while Google closed at $534.39, up $16.35.