Google in talks with mobile operators for cheap overseas calls

Google is in talks towards a deal with Hutchison Whampoa, the owner of the mobile operator Three, that will allow Americans to use their phones abroad at no extra cost, industry sources have disclosed.

The two giants are discussing a wholesale access agreement that would become an important part of Google’s planned attempt to shake-up the US mobile market with its own network.

It is understood that Google aims to create a global network that will cost the same to use for calls, texts and data no matter where a customer is located. By linking up with Hutchison, it could gain wholesale access to mobile service in the UK, Ireland, Italy and several more countries where the Hong Kong conglomerate owns mobile networks.

Sources said Hutchison was a natural partner for Google in the plan, because it has also sought to eliminate roaming charges for Three customers.

Google announced its plans to launch a mobile network last month. It will not build mobile masts but rely on wholesale deals to use existing infrastructure both at home and abroad.

The company described it as a “small scale” project. Industry analysts expect Google to use its network to put pressure on the pricing of America’s biggest mobile operators, AT&T and Verizon, who enjoy higher profit margins than their European counterparts.

It could also use the project to encourage operators to invest in new technology to improve mobile coverage via Wi-Fi networks.

Google has adopted a similar strategy in the US fixed-line telecoms market with Google Fiber, its project to build fibre optic networks in cities where there has been a lack of investment in internet infrastructure. It Nexus range of own-brand smartphones is similarly seen as a way to influence hardware manufacturers.

Sources said Google was has no plans to to offer a mobile network to British consumers and is unlikely to for the foreseeable future. The European telecoms market is relatively competitive and roaming charges are already on their way to being abolished by regulators.

Google and Three declined to comment.

Though Google’s plans are believed to be modest, a serious move by Google or Apple to enter the mobile market would be feared by the telecoms industry.

It is already resisting Apple’s attempts to do away with SIM cards and replace them with software that allows iPad owners to select any available network, weakening relationships between mobile operators and customers.

Apple also has patents on technology that would remove the customer choice and automatically switch between the best networks and prices, a system that if implemented could further undermine mobile operators.

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