Google’s entry into the mobile-phone business would create a new headache for an industry already struggling with a price war and soaring costs for wireless spectrum. Sprint executives are betting that the boost from an influx of new Google customers outweighs the risk that the Internet search giant will learn too much about the ins and outs of the wireless business. Still, Sprint is hedging its bet by putting a volume trigger into the contract that would allow the deal to be renegotiated if Google’s customer base swells, said one person familiar with the matter. Google executives first approached Sprint more than 18 months ago about a potential resale deal, known as a mobile virtual network operator agreement, or MVNO. MVNO agreements are a standard, high-margin business for carriers, which get to sell excess capacity on their networks and gain customers without having to bear the costs of marketing to them or signing them up.
Posted on: Thu, 22 Jan 2015 04:36:18 +0000
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