Google Sucking Premium Life Away From Telcos

The idea that Google might introduce a Gphone was never real, and if it was, posed little threat to the established carriers. With no experience building hardware (the enterprise search appliance hardly counts), Google would have disappeared down the rabbit hole of supply chain management horrors and unforeseeable product glitches (like exploding batteries), to the delight of Verizon, AT&T, T-Mobile and all the others.

But that was never in Google’s plans. Google looked at the wireless market from an objective distance and saw what is obvious to everyone: the carriers make money — and generate their highest margins — with services, not devices. And they charge ridiculous amounts for simple stuff like call forwarding, while being unable to provide truly useful services like speech-to-text. And no matter how much money consumers spend, they still can’t control the length of the messages they record or what the whole experience is as callers.

Now Google has gone and fixed all that with Google Voice. The most recent twist is that customers can keep their current phone number and still get many of the services provided by Google Voice, including:

• Online, searchable voicemail
• Free automated voicemail transcription
• Custom voicemail greetings for different callers
• Email and SMS notifications
• Low-priced international calling

Customers who pick a new Google number get these features too:

• One number that reaches you on all your phones
• SMS via email
• Call screening
• Listen In
• Call recording
• Conference calling
• Call blocking

Cost? It’s free.

And as Microsoft’s CEO, Steve Ballmer, is fond of saying, “It’s tough to compete with free.”

Google Voice is still a tiny smear on the windshield of the carriers’ revenue dashboard, but as it spreads beyond enthusiasts to the public at large, the carriers will be hard-pressed to continue charging for basic services when they can’t even match what Google offers.

It’s no wonder AT&T asked the Federal Communications Commission to investigate Google — and while Google isn’t a carrier and thus shouldn’t be subject to the same regulations as the telcos are, Google is taking advantage of a loophole lawmakers never considered; that with the convergence of IP and traditional telephony, you don’t have to own pipes to provide telecommunications services.

The answer for the telcos isn’t regulatory relief, however. It’s thinking about their customers. If they’d been doing that to begin with, Google wouldn’t have been able to swoop in with a better service that’s free to boot.

And while it’s free, it’s still a huge win for Google. Why? Because while one side of Google is busy organizing all the world’s information, the other side is busy getting the whole world online as often as possible, for as long as possible. Google’s main business is and always will be paid search ads. It’s proven itself smart enough to not try to shove ads at customers every which way — the company really does think about customers first — so, to compensate for that restraint, has made it its mission to keep customers online as much as possible.

Google Voice is another way to do that. And it’s sucking the highest-margin business right out from under the carriers.

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