Just as Apple shook up the phone industry with its advanced iPhone, Google hopes to do the same with the networks that manage mobile devices.
Earlier this year, Google made clear its intent, under the right conditions, to make a $4.65 billion bid for the 700 MHz wireless spectrum the Federal Communications Commission is putting up for auction in January.
Those plans are becoming more definite, with Google already running a test version of an advanced wireless network at its Mountain View, Calif. headquarters, according to a report in the Wall Street Journal today.
Last month, CEO Eric Schmidt told analysts his company is open to working with partners on the FCC bid, but according to the Journal, Google is now working out a plan to finance the bid using its own cash and possibly some borrowed funds.
Google declined a request to comment on its specific plans, but sent the following comment to InternetNews.com:
“Our goal is to make sure that American consumers have more choices in an open and competitive wireless world. We have already made great progress in achieving this outcome and expect more progress in the future. FCC rules require us to reveal our plans by December 3, and we fully intend to do so. In the meantime, we are making all the necessary preparations to become an applicant to bid in the auction.”
Google had earlier notified the government of four conditions related to open access for the spectrum that would influence its decision to make the minimum-asking bid of $4.65 billion.
At the analysts’ briefing, co-founder and president Sergey Brin said if Google wins the bid it will offer developers and users a network that will be “very open.” He said the government has already adopted two of the four openness pre-conditions Google requested. In the current system, wireless developers generally have to get a carrier’s permission to let their applications run on the network.
The latest developments come on the heels of Google’s big announcement earlier this month detailing its mobile phone plans, specifically, a set of open source software tools for bringing new applications to mobile devices. While a separate initiative, both the spectrum bid and the Google-led Open Handset Alliance (OHA) driving its mobile software plans are part of the company’s desire to open up mobile communications to more development and wider access.
“The auction is a tactic to get the outcome of end-user choice,” Schmidt said. Google is already operating an advanced high-speed wireless network under a test license from the FCC, according to the Journal’s story, which cited unnamed sources familiar with the project. The article said Google has erected transmission towers on its campus for the network and prototype mobile handsets powered by Google’s Android software that are currently running on it.
Google has quickly become a major player in the mobile and wireless industry, even though its first products aren’t expected to be available until later next year, said Gerry Purdy, Frost & Sullivan’s chief analyst for mobile and wireless.
“This raises the bar for the industry again, just as Apple did with the iPhone earlier this year,” said Purdy, in an e-mail commentary sent to InternetNews.com. “This is very similar to the Microsoft model, except with one big difference: Microsoft gets its revenue from licensing its platforms to handset makers, whereas Google will get its revenue from advertising done by advertisers presented to users of Android-based devices. Thus, Google will give away Android but make recurring revenue from an open ecosystem in which advertising drives revenues.”