The rough-and-tumble wireless business may get even rougher.
Two companies, Google and Cablevision, are seperately plotting ways to cut into profits from wireless carriers through Wi-Fi calling. According to reports from The Information and then the Wall Street Journal, the search giant is launching a service, coming later this year, to sell wireless service directly to consumers using both Sprint and T-Mobile networks. Per reports, Google would let customers flip between Wi-Fi hot spots and carriers.
Cablevision, a regional cable provider, is coming out with something similar next month: "Freewheel," a Wi-Fi monthly phone service coupled with broadband. At the onset, the phone will only be offered with Motorola's discounted Moto G. A Cablevision spokeswoman told Ad Age the company began "heavily marketing Freewheel" on Monday in the New York metro region.
If they come to fruition, the two services would take the prevailing wireless business model and flip it on its head. The Wall Street Journal explains:
In different ways, the two companies' plans would challenge the wireless industry's prevailing system of supplying service through exclusive agreements with individual phone carriers like Verizon Communications Inc., AT&T Inc., Sprint and T-Mobile.
While that approach has helped carriers collect the steady income needed to support massive investments in what are now some of the world's most advanced wireless networks, critics say it leads to higher prices and sometimes worse service.
According to reports, Cablevision will first market the service in the New York region before spreading nationally. Representatives from Google, Sprint and T-Mobile declined to comment.
Cablevision's plan, in one market and tied to one second-line device, is unlikely to dent the large carriers' bottom line. And analysts are skeptical that Google's proposed business, as a mobile virtual network operator, or re-seller, will alter the industry. But the two Wi-Fi plans come as the top four national carriers are steeped in an escalating promotional battle -- one prone to change almost daily.