Google Inc (NASDAQ:GOOGL) announcement that it is to set up a small wireless service continues to elicit risk tension especially with wireless company’s which remain concerned about the imminent competition. During an interview with CNBC, Wells Fargo telecom analyst, Jennifer Fritzsche, reiterated that cell tower stocks remain the biggest winners of Google’s entry of the space as they might be forced to build more towers.
Google Inc (NASDAQ:GOOGL)’s service would be small scale, but sure to send ripples to wireless companies that have controlled the space for a long time. Fritzsche is betting big on American Tower Corp (NYSE:AMT) and SBA Communications Corporation (NASDAQ:SBAC) as some of the notable stocks that should gain big, on Googles ambitions.
“In the most simplistic sense if a new competitor comes in even through what is called MVNO or virtual operator status. That means there are more antennas on the towers to support more usage. And the tower companies like American Tower, Crown Castel International Corp (NYSE:CCI) SBA are paid and more kind of junk being on the tower themselves,” said Mrs. Fritzsche.
The new project only goes to show Google’s ambition in extending beyond selling advertising services to influencing how internet access gets delivered. There has already been talk that Google Inc (NASDAQ:GOOGL) is looking to seal deals with carriers that are to be used to offer the internet services.
It remains to be seen whether the tower companies would be forced to build more towers in a bid to support increased subscribers that Google Inc (NASDAQ:GOOGL) is betting big on. Fritzsche is however casting doubts on increased subscribers especially in the U.S. as a majority of people already have wireless phones supported by current cell phone towers.
“There won’t be probably new subscribers because if you think in your own life, who doesn’t have a wireless phone? But I think if Google Inc (NASDAQ:GOOGL) got a lot more serious in the wireless arena with advertising behind it [..] then that will drive more usage for Google’s model or clicks which is what they want at the end of it,” said Mrs. Fritzsche.
Latin America remains a probable long area for growth for Google’s wireless ambitions according to Fritzsche; AT&T Inc. (NYSE:T) having already entered the marketplace, which is covered 60% by 3G networks and not LTE.
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