Report: Google, France Telecom may partner on ways to ease mobile network capacity strain

Google (NASDAQ:GOOG) and France Telecom are reportedly close to an agreement to collectively work on lowering the impact of data traffic on the operator's networks, according to a report in Bloomberg.

Citing two people familiar with the discussions, Bloomberg reported that the talks pertain to France Telecom's fixed and mobile networks, and rather reaching a financial deal, Google and France Telecom would likely strike a technological cooperation and research agreement to find ways reduce data traffic.

Mobile data traffic in Paris is growing by 5 percent each week thanks to videos such as those originating on Google's YouTube.

Last month, CEO Stephane Richard said during an investor day gathering  that he has had discussions with Google's founder Larry Page about how to better segment power users from the everyday Web surfers. Users that want a higher quality service, or higher speeds, would be required to pay a higher price for service. If France Telecom did develop such a plan with Google, the two companies would engage in a revenue share through different service and quality tiers.

In addition to Google, Richard said that the service provider would make a number of partnership announcements with Silicon Valley-based companies as early as a few weeks.

One of the common realities that all wireline and converged wireless/wireline service providers like France Telecom share is that while consumer and business use and bandwidth demands of wireless and wireline-based services has continued to rise, new revenue has been slow to follow. France Telecom's exploration of new partnerships with companies like Google is all about revenue.

Mobile operators globally and especially in the U.S. have been grappling with how best to manage data traffic. The solutions range from imposing tiered data plans to offloading data on Wi-Fi. Verizon Wireless (NYSE:VZ) recently embraced the idea of Wi-Fi offload. Other technologies can perform tricks such as storing more content on mobile devices rather than pushing it over wireless networks. Deutsche Telekom told Bloomberg that it plans to introduce various levels of data connection quality to adequately manage data traffic growth while still enabling high-bandwidth services such as video conferencing and telemedicine.

For more:
- see this Bloomberg article

Related articles:
France Telecom considers developing relationship with Google
Google moves to calm mobile operators, hints at network investment
France Telecom, Telefónica push for content charging
Mobile operators call for action on content providers
Operators hint at charging 'bandwidth-hogging' content providers
O2 UK CEO: 'Charge content providers for network traffic'