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Google In Talks To Create International Roaming Network

Posted by timothy on from the hello-operator dept.

jones_supa writes Google is in talks towards a deal with Hutchison Whampoa, the owner of the mobile operator Three, that will allow United States customers to use their phones abroad at no extra cost. 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.

1 of 25 comments (clear)

  1. Re:Good! by hankwang · · Score: 3, Interesting

    Telecom is hugely profitable, mobile telecom even more so.

    Could you provide some data to support that statement? Not that I think the roaming charges are reasonable (since they are completely disconnected from actual costs for the operators), but that would just mean that domestic charges should go up and international/roaming rates should go down.

    Look for example at the Vodafone annual report (big PDF), income statement on page 96. On 38 bn UK pounds annual revenue, the made 5 bn loss (before taxes, not including the profitable sale of their stake in Verizon).

    Or the T-mobile US numbers on 2014 (full year). Page 6: US$ 14 bn revenue; net income US$ 0.25 bn. That does not look like a hugely profitable business to me. Or the balance sheet on page 5: US$ 57 bn assets, and only US$ 16 bn of stockholder's equity; a ratio of 3.6:1, which I'd consider pretty large for a company that is not making a large profit and that has to deal with rapidly depreciating infrastructure.

    Here's Verizon 2014 full year: US$ 127 bn revenue, US$ 12 bn net income. That looks more healthy. But look at the balance sheet: US$ 232 bn assets, and just US$ 14bn in equity (16:1 ratio). I would be very hesitant to invest in a company with such a balance sheet. To my surprise, the stock market thinks differently with a P/E of 21.

    I'm not a finance expert, so if I misinterpret the numbers, please correct me.

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