Google Inc. said it plans to launch a U.S. wireless service, raising a new risk of tension between the Internet company and the wireless carriers that support its Android mobile-operating system.
The service would be small-scale and not intended to compete with the four big U.S. national carriers, Sundar Pichai, the Google executive who oversees Android, told an industry conference in Barcelona. Instead, it would be intended to demonstrate technical innovations that carriers could adopt.
However small Google’s entry, the move by the creative and well-capitalized technology company is likely to send ripples through a business long controlled by Verizon Communications Inc., AT&T Inc., Sprint Corp. and T-Mobile US Inc. It is a strong signal that Google’s ambitions extend beyond selling advertising and services over the Internet to influencing how Internet access is delivered.
“You will see us announce it in the coming months,” Mr. Pichai said. “Our goal here is to drive a set of innovations which we think the system should adopt.”
The comments confirmed earlier media reports of the company’s plans. Google has struck deals with Sprint and T-Mobile to resell service on their networks, people familiar with the matter have said. Mr. Pichai said on Monday that Google would team up with carriers to launch the service but didn’t name them. AT&T, Verizon, Sprint and T-Mobile declined to comment.
“This raises another tension point in the new complex friend-and-foe relationship between Google and operators,” said Rajeev Chand, head of research at Rutberg & Company, an investment bank focused on the mobile industry. “You have to wonder what the market-wide impact will be.”
Google’s planned service would sift through cellular connections from Sprint and T-Mobile and Wi-Fi “hot spots,” picking the best signal for routing calls, texts and data, these people have said. Mr. Pichai said the service aims for seamless handoffs between Wi-Fi and cell networks to prevent dropped calls and automatically re-connect them.
Google says it is focused on improving the quality of wireless connections. But tapping Wi-Fi networks could reduce the amount of data users transfer across cellular networks, undermining a growing source of income for wireless carriers.
“If Google focuses heavily on cheaper data usage, that would have downward impact on pricing for mobile operators,” said Neil Mawston, an mobile-industry analyst at Strategy Analytics. “This may go two ways: Lower priced data may encourage much higher data usage, which would be relatively positive for carriers, or Google may drive down data prices so quickly and it could chip away at mobile operators’ profits.”
Mr. Mawston said Google has a history of lowering prices in areas such as maps, email and Android itself, which is free for handset makers. It also challenged telecom-industry giants with its high-speed fiber-optic Internet service in a few cities. AT&T responded with a higher speed service of its own.
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