Google to use Sprint network to offer wireless service, source says

Bloomberg News

Google Inc. is getting into the wireless business after reaching an agreement to use Sprint Corp.'s network, according to a person with knowledge of the matter.

Masayoshi Son, the president of SoftBank Corp. who bought Sprint in 2013, was integral in facilitating the talks between Sprint and Google, said another person, who asked not to be named because the discussions were private. Google will pay for capacity on Sprint's network and then sell the service to its own customers. The financial terms are similar to those of other mobile virtual network operators, and Google may start its service as soon as this year, the person said.

Offering wireless service would require Google to manage hardware sales to consumers and compete with the carriers that currently sell and promote Google's Android-based mobile phones. It wouldn't be the first time Google has competed with those service providers — the company has already introduced broadband Internet service in a handful of U.S. cities and has said it's looking to expand further. Google also operates Wi-Fi hot spots in some regions.

The deal between Sprint and Google was reported by the Wall Street Journal, citing people familiar with the matter. The newspaper also said Google has signed a deal with T-Mobile US Inc.

Selling wireless service could enable the Web giant to gain more mobile-device users to help sell mobile ads.

Google has been wrestling with the mobile transition, as users gravitate away from search ads online on personal computers and instead use smartphones and tablets more. Google's mobile ad business has been growing quickly, though prices for those ads cost less than ones on PCs, meaning Google must quickly increase the volume of mobile ad sales to make up for lower prices on each ad.

Copyright © 2016, Los Angeles Times
69°