On Wednesday, Google Inc. unveiled their new US wireless service which saw the internet giant move even further into telecom bringing uncertainty to the wireless industry.
With a wireless industry that is already embattled with pricing between competitors, Google Inc. (GOOG, +1.01%) will inject further uncertainty when unveiling its wireless service. These services will see the internet giant move further into telecom.
Expectations are that the service will allow Google customers to only pay for the amounts of data they use monthly. People who are familiar with this say that this move from Google could push carriers to abolish lucrative “breakage”.
More traditional plans see wireless subscribers paying for bundles of data that expires month end despite usage thereof or not. Validas, who help customers choose the correct plan by analyzing their bills, released a study in 2013 that indicated that smartphone users wasted on average around $28 every month on unused data.
However, the practice is feeling more pressure. Smaller companies like Scratch Wireless and Republic Wireless have offered models that include usage based billing, whereas bigger carriers like AT&T Inc. (T, +0.61%) and T-Mobile US Inc. (TMUS, +2.22%) have implemented models that allow users to roll data over from one month to the other.
Importantly, Google’s wireless service will leverage on the T-Mobile and Sprint Corp (S, +2.01%) networks, who will carry the traffic. The Nexus 6 phones from Google will initially be the only device with this service available which will allow the device to switch dynamically between T-Mobile and Sprint networks, determined by the stronger signal.
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