Google's Motives in Wireless Could be Tied to 'Supercookies'; Goldman Sachs Comments (GOOG) (GOOGL)

Goldman Sachs analyst Heather Bellini commented on speculation Google (NASDAQ: GOOGL) (NASDAQ: GOOG) plans to sell wireless phone service directly to consumers. Recent rumors suggested it is planning to team with Sprint Corp. (NYSE: S) and T-Mobile (NYSE: TMUS) to offer the new service, making Google a mobile virtual network operator (MVNO).

Bellini said the news isn't necessarily new given its previous investment in Clearwire and failed bid on spectrum in the 700 MHz auction.

"To frame the debate, we categorize Google’s motives to be an MVNO in two separate goals: 1) Google wants to improve the commercial appeal of Google Fiber by offering a wireless bundle; or 2) Google has ambitions to be a major player in (and disruptor of) the wireless market," said Bellini. "The former would be an incremental move with minimal impact on the broadband and wireless markets whereas the latter could prove meaningful."

"While MVNO deals are not uncommon and have been historically embraced by Sprint and T-Mobile, we do see an attractive MVNO agreement as a key success factor for a new entrant to the wireless market (as discussed in the Telecom research team’s 1/15/15 note Fixed is the new mobile)," continued the analyst.

"If Google’s goal is to bundle wireless phone service along with broadband internet, one inconsistency we point out is that is that Google Fiber is a premium service (claiming 100x the speed of basic broadband) so bundling with Sprint and T-Mobile would provide a mixed user experience," she added.

On the topic of supercookies, Bellini said, "Overall, a question that remains is if an MVNO deal can give Google access to 'supercookies' which telecom operators have access to. Supercookies can track a user’s every internet move and are essentially unerasable and could give Google a level of data beyond the web browser cookie," she added.

For an analyst ratings summary and ratings history on Google click here. For more ratings news on Google click here.

Shares of Google closed at $520.39 yesterday.

You May Also Be Interested In

• Alphabet (GOOGL) PT Raised to $175 at KeyBanc
• Threshold to make it into the Top 100 biggest global companies is now at $141B - report
• Uniti Group (UNIT), Windstream Said To Near $15 Billion Combination - Bloomberg