Google to Fund, Develop Wireless Networks in Emerging Markets

 In Mobile Industry

Google Inc. is deep into a multipronged effort to build and help run wireless networks in emerging markets as part of a plan to connect a billion or more new people to the Internet.

These wireless networks would serve areas such as sub-Saharan Africa and Southeast Asia to dwellers outside of major cities where wired Internet connections aren’t available, said people familiar with the strategy.

The networks also could be used to improve Internet speeds in urban centers, these people said.

Google plans to team up with local telecommunications firms and equipment providers in the emerging markets to develop the networks, as well as create business models to support them, these people said. It is unclear whether Google already has lined up such deals or alliances.

A Google spokeswoman declined to comment.

In some cases, Google aims to use airwaves reserved for television broadcasts, but only if government regulators allowed it, these people said.

The company has begun talking to regulators in countries such as South Africa and Kenya about changing current rules to allow such networks to be built en masse. Some wireless executives say they expect such changes to happen in the coming years.

As part of the plan, Google has been working on building an ecosystem of new microprocessors and low-cost smartphones powered by its Android mobile operating system to connect to the wireless networks, these people said. And the Internet search giant has worked on making special balloons or blimps, known as high-altitude platforms, to transmit signals to an area of hundreds of square miles, though such a network would involve frequencies other than the TV broadcast ones.

Google has also considered helping to create a satellite-based network, some of these people said.

“There’s not going to be one technology that will be the silver bullet,” meaning that each market will require a unique solution, said one person familiar with Google’s plans.

The activities underscore how the Web search giant is increasingly aiming to have control over every aspect of a person’s connection to the Web across the globe.

The Mountain View, Calif., company now makes its own smartphones and tablets through its Motorola Mobility unit. It owns Android, the most-used mobile operating system for smartphones, and it is also preparing to sell Google Glass, a wearable device for people’s faces that it hopes will transform computing.

Connecting more people to the Web world-wide creates more potential users of its Web-search engine and other services such as YouTube and its Google Play media and app store. More than half of the world’s population doesn’t use the Web, particularly in developing nations, researchers say.

More Internet users, in turn, would drive online advertising on many of Google’s services. The company currently derives 87% of its annual $50 billion in revenue from selling online ads.

Google’s expansion can also net more data about consumer behavior, which can be used to create more personalized services and target individuals with more relevant advertising, said Narayanan Shivakumar, a former Google engineering executive. And by profiting from data it gleans from how people use a network it operates, Google could build a business more cheaply than traditional carriers do today.

Providing wireless networks would allow Google to circumvent incumbent cable companies and wireless carriers. Such companies, particularly in the U.S. and Europe, have clashed with Google, believing it is unfairly reaping profits on the back of their networks. Google has long feared such companies would make it harder for its Web services to work properly on the networks, said people with direct knowledge of the matter.

In the U.S., Google has deployed its own fiber-optic cables to wire up homes in cities in Kansas with high-speed Internet and video, and it has plans to do the same in cities in Missouri, Texas and Utah and elsewhere. Google also plans to launch powerful Wi-Fi networks in those markets that piggyback on its wired network, allowing anyone to use their mobile device to access the Web while they are in public spaces, said people familiar with the matter.

In mid-2011, Google also engaged in advanced discussions to buy rights to the airwaves, or spectrum, owned by wireless operator Clearwire Corp., according to people with direct knowledge of the matter. The talks ended without a deal as Google pursued its blockbuster acquisition of Motorola Mobility.

And last year, Google held talks with satellite-TV provider Dish Network Corp. to partner on a new U.S. wireless service that might rival the networks of carriers such as AT&T and Verizon Wireless, people familiar with the matter have said.

Separately, Google also has made financial investments in Internet-access-related startups such as O3b Networks Ltd. O3b this year will launch special satellites that would broadcast signals to power new networks operated by telecom companies for remote areas of developing countries around the world.

The drive to be a vertical player starts at the top of Google. Chief Executive Larry Page for years has spearheaded secret research on alternative methods to provide more people with Internet access, and has become more active in thinking about providing wireless Internet access to consumers, said people familiar with the matter.

The initiatives have since become more serious and are being led by Google’s “access” unit, the Google X lab led by Google co-founder Sergey Brin, and Google.org, the company’s nonprofit arm, these people said.

Google sees its revenue-generating Web services as “inextricably linked to the infrastructure” of the pipes that bring the Web to people’s devices, said David Callisch, a marketing executive at Ruckus Wireless Inc., which helps build wireless Internet networks and has worked with Google on Wi-Fi projects.

Some of Google’s steps toward giving emerging markets wireless access are public, with the company working with other organizations to convince governments in sub-Saharan Africa and Southeast Asia to change regulations to create new wireless networks using previously restricted airwaves. Google has long been involved in public trials to prove the technology—which operates at lower frequencies than some cell networks, allowing signals to be more easily transmitted through buildings and other obstacles and across longer distances—can work. Continue reading… click here for full article.

Article from The Wall Street Journal, written by Amir Efrati.

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