I Observe, I Learn, I Share: Impact of Google’s Project Fi on Telefonica

To understand and answer these questions, we must first analyse what is MVNO market and its relationship to mobile network market. The need for MVNO was provoked by poor quality of service provided by the existing companies. While both markets are in communications, MVNO aims at providing only a data service and mobile networks provides voice, text as well as data services. MVNO market is not something new. Many players are already existing in this market. Then why such a big fuss with Google.

Off course ! There has to be one with Google always.. J

Let’s first see what is offered as a differentiating factors (affect its adoption rate as well) :--

- For the first time, a company is engaging with more than one company to provide MVNO services. It’s competitors such as Republic wireless rely only on one service provider.

- Pay as per usage pricing

- As Google (and others) have done often, it will provide a feel good factor to its users and another opportunity to brag about being updated “Whats up my friend Tom..!! See… I can stream a video from anywhere.. Project Fi.. I love it.. !!”

- Google’s financial backup (very much needed by MVNOs now)

Given these factors, there are also some factors which can put the whole show down. Google if wants to disrupt the mobile network market can do it through a more forceful way with support from its ad-supported plans. The things to watch out for Google will be how to provide maintenance support. Also it is said for every successful venture from Google, there are more than 10 failed. Fi has to cross through this acid test.

So why is Google here? What’s its agenda?

1. Providing it through Nexus 6, making the pride factor even intense.

2. Forcing telecom operators to offer competitive prices and better service (including data service, which will indirectly help Google in many ways)

3. As a strategic move (Google Fibre, Google Loon and now Project Fi). It is fitting in another piece in the whole puzzle may be to move towards a Google Mundo.

So the disruption. Hmm.. !! Yes the disruption will happen but it will happen in a much slower way then speculated and on a much larger scale (Google Mundo).

It definitely does not pose a threat to existing mobile network providers, however it will definitely tighten their pricing policies. Also it will be critical for mobile network service providers to find a place in the new ecosystem. Good news for us (consumers) .. J

Now lets us see how project fi can impact Telefonica.

Telefonica is a Europe telecom giant with presence in more than 21 countries (not in US though). The recent launch will definitely not have a direct impact in Telefonica but it can be seen as a warning or even better, as an indicator for taping same opportunity in Europe and Latin America. Telefonica needs to adopt or it will die. Be unicorn or be extinct as dinosaurs. Telefonica, if understands that they are not a Mobile network provider but a network provider, can take an early mover advantage in its well established territory.

There can be a few ways to grab this place:

Partner with Google: if Google decides to enter these territories, Telefonica can think of partnering with Google. This will definitely boost the brand recognition. People are very happy and PROUD with Google and the biggest reason they will move to project fi is the trust they have in Google’s services over other network service providers. The merger will not only hedge any potential financial and market share threat but also provide them an opportunity to improve their existing service problems through technological expertise of Google.

Focus on own strengths: I believe Telefonica must start investing in improving its data services. Remember project fi will impact individual household customers more than corporations and big institutes. After all, if they can provide a more robust data service to their clients, why would they move to any MVNO’s.

Establish a subsidiary combining synergies and best of both the above (My recommendation): If Telefonica establishes another brand under its own umbrella, focusing on MVNO solutions, it can be a major step to grab this place.

- Not only is this a futuristic step but also is a great way to increase existing customer base. This will help Telefonica to retain its advantage in its strong markets and intrude in other markets under the name of MVNO service provider.

- A good replica of what project fi is doing right now, by partnering with more than one service providers can add to its value.

- The proposition will act like reserving a place for Telefonica for future, in advance. It’s important to adopt and not remain dinosaurs to get extinct after all.

- It can also provide opportunities to collaborate with Google or may be Facebook for its technical capabilities to provide a data network (not a mobile network).

- Solutions offered by Telefonica right now definitely state that they have potential to be a leader in this market. Project Fi provides a great advantage to travellers, while a product from Telefonica already does it, proving its capabilities.

Invest in technology, it will always help but make sure your technology is new as well.