Google's wireless plans could kill commercial WiFi

By Roger Entner

According to Business 2.0, Google intends to enter the WiFi hotspot market in the US through a free ad supported model.

The hotspot initiative is an off-shoot from its move to lease its own fibre to avoid transport fees and to become a network peering partner. With all the bandwidth that comes with this, Google can also run its own hotspots in a very financially favourable way. Apparently Google is already supporting Feeva, a San Francisco free hotspot venture and may be involved in further rollouts. This is putting commercial WiFi providers in a potentially lethal position due to the increasing onslaught of free municipal networks on one side and free Google hotspots on the other. Commercial WiFi providers are basically squeezed in the middle and are condemned to wither away.

What's next? A licensed strategy could also make sense with another round of auctions in both the 700MHz and the Advances Wireless Spectrum, the US 3G spectrum in the 1700 and 2100MHz bands, both coming up in 2006. This way Google could realise its vision of making information universally available. Becoming a service provider would be quite a stretch for Google, but considering the billions of dollars Google could throw at the problem it could become a reality. The challenges would be daunting, ranging from running a wireless network, managing a handset portfolio, to distribution and customer service. None of these are areas where Google has a deep understanding yet. Depending on how Google can adapt to these challenging areas and how committed it is to the space, it could become a home run or could break the bank.

Roger Entner is the VP Wireless Telecoms for Ovum, covering market developments, technology trends and companies in the North American market. He can be contacted directly via roger.entner@ovum.com.