Report: Google's MVNO could launch this week, will credit customers for unused data

Google's (NASDAQ: GOOG) MVNO could launch this week, according to a Wall Street Journal report, and it will give customers credit for unused mobile data.

The report, citing unnamed sources, said the service will allow customers to pay only for the amount of data they actually use each month. That offer is interesting because Sprint (NYSE: S) MVNO Republic Wireless just this week announced the very same offer of refunding unused data in the form of credit.

Google declined to comment, according to Bloomberg.

As had been previously rumored, the Journal reports that the Google MVNO service will run on Sprint's network and T-Mobile US' (NYSE:TMUS) network. At launch, the service will only run on Google's Motorola Mobility-made Nexus 6 phone, and the device will dynamically be able to switch between Sprint and T-Mobile's networks depending on which carrier offers the strongest signal. The service will also route calls and data traffic over Wi-Fi when possible.

Interestingly, according to the report, Sprint's decision to back the service was not made lightly--it came directly from Sprint Chairman and SoftBank CEO Masayoshi Son and former Sprint CEO Dan Hesse. Sprint secured an agreement from Google to limit the volume of traffic on Sprint's network from the MVNO and to allow Sprint to renegotiate the deal if Google's service grew too popular.

"While Google may not be targeting huge numbers of subscribers, their entry into this market is very important, because it has the potential to disrupt the wireless industry in much the same way Google Fiber prompted changes in the cable and broadband industries," Rutberg & Co. analyst Rajeev Chand told the Journal.

By refunding customers' unused data, Chand noted, Google could make data more affordable and encourage more people to use the Internet--where Google makes most of its money by delivering ads targeted to search results.

Google's Sundar Pichai, the search giant's senior vice president of products, confirmed last month at the Mobile World Congress trade show that the company will launch an MVNO in the U.S. on a limited basis in "the coming months" to spur innovation in the wireless market. Pichai did not confirm Sprint and T-Mobile as launch partners.

"We don't intend to be a network operator at scale," Pichai said. He noted that Google has pushed the boundaries of software and hardware with its Nexus device program and that it is time to add connectivity to the mix. "We want to be able to experiment along these lines," he said.

For more:
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see this The Verge article

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