Enterprise Virtualization (NFV)

Google taking steps to be a European MVNO?

Long-awaited deal with Hutchison supports data roaming in Europe for US Project Fi users, but may develop into something more disruptive.

The WiFi-first MVNOs of the US are storming Europe now, creating yet another headache for incumbent operators which are already under siege from cablecos and quad play telcos. FreedomPop already operates in the UK and has this week announced expansion into Spain. And now Google has come closer to becoming a European MVNO with its data-centric Project Fi service.

So far, Google is only promising connectivity for US customers when they travel in Europe, via an agreement with Hutchison Whampoa’s MVNE business, Hue. But ever since Fi launched in the US in April 2015, there have been reports that Google was talking to Hutchison about a deal which would extend beyond roaming to support service launches for customers in non-US markets.

Hutchison set up Hue at about the same time that Fi launched in the US, and the potential for a Google deal may have been one spur to set up an MVNE (mobile virtual network enabler) in the first place – it certainly has been quiet on any other customers since. There are few details of its new agreement with the search giant. Hutchison said Hue would provide “international data coverage” to Project Fi customers travelling in Europe.

Google said in a statement to its customers that they would get faster data speeds when visiting Europe thanks to the new arrangement, with no roaming fees. “With the addition of Three to the Project Fi network, we’re now able to deliver speeds 10-20 times faster than before. And, just as before, there are no extra fees for using data internationally – you pay the same $10/GB that you do at home,” it said.

Its reference to Three, Hutchison’s mobile retail arm in Europe, rather than Hue, suggests that, for now at least, Fi roaming will be enabled by that MNO. However, Hue is independent of Three and will need to look for other partners in the markets where the the Hutchison MNO does not operate (Three is active in the UK, Italy, Ireland, Austria, Denmark and Sweden).

Three is said to be open to the deal, even if it risks enabling a competitor, because it too wants to eliminate roaming charges for its customers. Access to Google’s US footprint, which was announced last year, is an obvious benefit for Three.

But Hue is far more disruptive, and probably a shinier jewel for its parent, than Three. It will enable companies to enter Europe as MVNOs with just one central deal which can then support coverage across the region, saving them from negotiating individual local deals with MNOs. That removes one more barrier to the web giants and the WiFi-first players expanding internationally at high speed.

The MVNEs have been around for years, of course, easing the process of provisioning and managing large numbers of MVNOs, for the network operators and their virtual customers. Companies like Transatel and x-Mobility are well established in Europe, offering services to set up smaller MVNOs quickly, negotiating and managing the complex arrangements on their behalf and accelerating that revenue stream for the host operator.

But their model is evolving along with that of the MVNO. It is easy to see how such operations could evolve into more flexible, marketplace-style virtualized platforms in future, bringing the traditional MVNE out of the shadows and into the starring role in the network of thousands of MVNOs, paying for bandwidth on demand depending on the services they offer. This would fit neatly with Google’s long-espoused vision of dynamic bandwidth access, one which is finally becoming technically feasible courtesy of virtualization, platforms-as-a-service and the promise of 5G network slicing.

These hosted systems will start by making it far quicker and cheaper for network owners to support more MVNOs and grow wholesale business, and will end up by placing the real power in the mobile access business in the hands of the cloud provider, which will often not be the MNO.

Hutchison, however, has the resources, and the boldness, to invest in the cloud platforms to provide an end-to-end network as-a-service offering to rival those envisaged by the IT and web giants. Combined with its MNO units, this could deliver far greater business expansion than acquiring additional mobile capacity and customer base in individual European markets.

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