After months of speculation and whispers, Google confirmed on Friday their plans to submit a bid for wireless spectrum to be auctioned by the Federal Communications Commission early next year. Just what they plan to do with it, however, has yet to be revealed.
Google mentioned in the statement that their application to bid on the wireless spectrum does not include any partners, but did not say whether they have intentions to construct and operate a wireless network on their own. Speculation has ranged from Google making its own wireless phone, to developing an operating system that other device makers could use. However, even though Google is intending to bid alone, the possibility of later assembling a coalition still remains if Google wins the bidding.
It’s also not clear just how much money Google is willing to pony up to ensure a winning bid on the spectrum. However, with an estimated 13.09 Billion in cash on hand, the figure is likely to be very competitive.
Google CEO Eric Schmidt said, “We believe it’s important to put our money where our principles are. Consumers deserve more competition and innovation than they have in today’s wireless world. No matter which bidder ultimately prevails, the real winners of this auction are American consumers who likely will see more choices than ever before in how they access the Internet.”
In other, possibly related news, analyst Mark Mahaney of Citigroup said that mobile advertising is one of the company’s two largest growth opportunities, but cautioned that payoffs from any investments in wireless are likely a long ways off. The potential upfront costs and eventual network build-out could exceed $10 billion, and investors have reacted cautiously to the company’s move to expand beyond their core search and online advertising services.
Several other analysts have speculated that Google is more interested in ensuring certain requirements for network openness, and is bidding just to preserve those rules.
The FCC auction for the 700MHz spectrum is scheduled to begin on January 24, 2008. Hopefully then it will become more clear just what Google’s plans are for the wireless spectrum, if they secure a winning bid.
