Telecoms.com periodically invites expert third parties to discuss the biggest challenges facing the telecoms industry today. In the first of a three-part series looking at the implications of Google’s Project Fi for the mobile industry status quo Dave Fraser, CEO of Devicescape, analyses Google’s effective separation of the mobile service from the mobile network.
Running a mobile network and serving a customer base are radically different skill sets; at times so far apart as to be almost in conflict. Recognising this, mobile operators have long pondered — and experimented with — the separation of the ‘netco’ and the ‘serveco’.
The closest the industry has come to achieving it is through the introduction of MVNOs, which have always been about service innovation. But, despite its successes, the MVNO model has remained fundamentally tied to the network by the structure of wholesale deals.
And then, in April last year, along came Google with Project Fi; for my money the most radical development in the history of smartphone connectivity provision.
The connectivity behind Project Fi is sourced from multiple, overlapping mobile networks, as well as a collection of shared public Wi-Fi access points. The service, and the user, move between them under Google’s guiding hand.
Here is something which can be understood by the customer as a ‘traditional’ mobile proposition, but which represents not so much a separation of the service from the network as a timetable for their divorce. A decree wifi, if you like.
For the user this is a hugely attractive proposition. They need no longer be wed to a network for better and for worse, because there are always other options. It is a model of smartphone connectivity provision with genuinely transformative potential.
Transformation can be intimidating for those who don’t seek it, however. Perhaps for this reason Project Fi was presented by Google as a (relatively) small-scale experiment. User access was by invitation, it was available solely in the U.S., and it was limited to just a handful of compatible smartphones. Google was careful to position the suppliers of Project Fi’s underlying cellular connectivity as ‘partners’ helping it to “push the boundaries of what’s possible.”
For all the soft language, the boundary which is being pushed most effectively by Google’s MVNO is the one which controls the distance between mobile operator and consumer.
With Project Fi, Google decides when its wholesale cellular suppliers win the right to provide service, connection by connection. Those suppliers submit to revealing examinations wherever their networks overlap with one another, or with available shared public Wi-Fi. And Google, with the raging thirst of the dataholic, builds a map of network service areas altogether more meaningful and valuable than the self-portraits published by operators.
This is seismic stuff, seen in some quarters as a signal that the industry’s tectonic plates are ready for an epochal shift. Certain analysts believe mobile operators are destined for a future in which their principal business will be the sale of wholesale capacity to internet service and application providers which excel at the creation, delivery and amalgamation of a range of customer experiences.
While the same case was made with the first appearance of MVNOs, the significant difference in this instance is that the aggregation at the heart of Project Fi chokes the individual influence of each wholesale provider.
It is easy to dismiss such an idea as far-fetched but it is also unwise. The harsh truth is that the great innovators in the mobile experience today come from outside the traditional mobile industry, and have succeeded by pushing their services onto mobile networks.
Those networks are tremendous assets but, if operators do not find ways to push their own services beyond them, then they act as a constraint; a boundary beyond which operators are unable to deliver value to the consumer.
Some operators have taken positive steps. A burst of activity around Wi-Fi calling which began two years ago showed promise. But operators did nothing to help customers access the connectivity the service required. Wi-Fi calling only works when and where customers connect to Wi-Fi for themselves. Imagine the same experience over cellular and you see the size of the hole in the thinking.
Google understands that, while the service must be able to exist entirely independent of any one network, consistency in the overall customer experience is imperative. That experience requires that Google provide connectivity first, and service second. The only difference between Wi-Fi and cellular networks in this scenario (because there is management of Wi-Fi for quality) is the cost of access.
So convinced is Google of consumers’ love for Wi-Fi that it has staked its MVNO brand on the convenience and cost benefits of this most ubiquitous connectivity resource. And who’s going to bet against the rationale of a company that has launched seven separate products which have each attracted more than one billion users?
If incumbent mobile operators believe that Project Fi demonstrates no threat to their establishment they need do nothing. But if, as we believe, this is part of a truly fundamental shift, the reality is that Wi-Fi — whether in the home, the office, or in the public places where consumers gather in large numbers — remains operators’ most effective means of aggregating connectivity to enhance the breadth and performance of the service they provide.
Whether Google’s intention is to increase the reach of Project Fi as we currently know it, or to pave the way for a new wave of MVNO aggregators, remains unclear. But it shows no inclination to sit back:
- The number of aggregated networks in Google’s U.S. pen has gone from two to three;
- It has entered the European market through a key roaming deal with Hutchison.
- It has made the automatic Wi-Fi connectivity element of the service available to all Nexus smartphones, providing a taster of the wider Project Fi experience to other operators’ customers;
- It has lifted the ‘invite-only’ restriction on customer sign up.
This is no mere dalliance. A ‘project’ can be a grand plan as well as a hobby, and Project Fi makes a bold statement of Google’s views on both the way in which a connectivity service needs to be structured, and the role of the mobile operator in the delivery of that service.
Next week, Dave Fraser looks at the pressure Google is applying to the other great pillar of the traditional mobile industry; the device sector.
Dave Fraser has been designing, building, marketing, and managing software for more than 30 years. He was instrumental in the development of Devicescape’s Curated Virtual Network and the connectivity, engagement and insight services it enables for operators, app developers, and consumer brands. Prior to joining Devicescape, Dave worked for Wind River (acquired by Intel), holding a variety of executive positions including chief marketing officer, and senior VP product business. He previously held senior roles at Convergent Technologies and Hewlett-Packard.