Google (NASDAQ: GOOG) is talking to Hong Kong-based Hutchison Whampoa about a potential wholesale deal that would let the company's MVNO customers roam on Hutchison's mobile networks at no extra charge when traveling overseas. According to a report in the Telegraph that cited unnamed industry sources, the wholesale roaming agreement is part of Google's plan to shake up the U.S. market by creating a global network that charges the same price for voice, data and text messaging no matter where a user is in the world.
Hutchison Whampoa operates mobile networks in several countries including Hong Kong, Macau, Indonesia, Vietnam, Italy, Sweden, Denmark and more. It also operates the UK's Three network and is trying to acquire UK's O2 network from Telefonica. Sources told the Telegraph that Hutchison Whampoa is a natural fit for this type of deal because it owns UK's Three, which has tried to eliminate roaming charges for its customers. Google and Hutchison Whampoa would not comment on the reported deal.
At the Mobile World Congress conference in Barcelona, Spain, last month, Google's Senior Vice President of Products Sundar Pichai confirmed that the search giant is planning to launch an MVNO in the U.S. on a limited basis in the coming months to spur innovation in the wireless market. Although Pichai did not say which operator or operators would provide the underlying connectivity, several reports have indicated that Sprint (NYSE: S) and T-Mobile US (NYSE:TMUS) will be Google's network partners.
Pichai said that Google envisions a wireless service that will be focused on making cellular and Wi-Fi connectivity experiences seamless. He also hinted the company would have a technology that allows dropped wireless calls reconnect automatically.
But Google's idea of charging customers no extra fees for international roaming isn't unique. In late 2013, T-Mobile effectively killed global data roaming rates in more than 100 countries for customers on its Simple Choice rate plans. At the time, T-Mobile CEO John Legere said that the decision to offer international data roaming for free would not hurt the company's bottom line and claimed that rival carriers such as AT&T Mobility (NYSE:T) and Verizon Wireless (NYSE:VZ) make upwards of 90 percent margin on their data roaming rates.
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