According to unnamed sources, Google is negotiating with Nokia to acquire the latter's aircraft broadband business. Google hopes to get involved in new service areas and get more users by offering high-speed Internet access services on the plane.
Nokia announced its air-to-ground connection network technology at the end of last year. The network speed is faster than the on-board Internet company Gogo. Having its own Wi-Fi system on the aircraft allows Google to introduce users to Google products such as YouTube or Play. music.
If the acquisition is completed, it will become one of several communication-focused projects being carried out by Google's parent company Alphabet. Currently, Google's ongoing communications layout includes:
Google Fiber: Up to 1Gbps Internet bandwidth for US users;
Loon: Use a giant balloon to connect the Internet to remote areas;
Work with Starbucks to provide Wi-Fi to customers.
Bloomberg reported that aircraft Wi-Fi technology is not as important to Nokia as other telecommunications services. In February, Nokia acquired a mesh Wi-Fi startup that could partner with Google Fiber, which is trying to enter the home Wi-Fi space.
The above-mentioned insiders said that Nokia's technology will help Google provide faster Internet access services than current WiFi networks. Negotiations between the two sides have reached a later stage and an agreement may soon be reached.
It is reported that the two sides have not yet made a formal decision, they may still choose not to reach a deal. Alphabet and Nokia did not comment on this.
Google negotiates Nokia's broadband business to enter new service areas
According to the Nokia website, Nokia's cellular-based LTE A2G system establishes a direct connection between the aircraft and the ground base station, rather than relaying signals through satellites, enabling the aircraft to provide high-speed Internet access to passengers.
Accessing the Internet on airplanes has been a pain point for consumers for many years. Passengers often have to pay a high price for using the Internet on the plane. This is a considerable business opportunity and an opportunity for Google to expand its range of services.
Google’s acquisition of Nokia’s aircraft broadband service may create a new competitor for Gogo, the current aircraft Internet access service provider. Gogo fell more than 4% due to Google’s purchase of Nokia’s broadband business news
The increase in the Alphabet was 1.6%, which was lower than the 2.5% increase in the GICS Level 1 index of the S&P 500IT sector.
Although Nokia has been developing aircraft Internet access technology, in its view, this project is less important than 5G telecommunications network equipment.
Since the high-speed Internet access service is critical for its search engine, Youtube video service and advertising business that accounts for 90% of its revenue, Google Communications Business Group is looking for ways to spread mobile connectivity services. The Communications Business Group is responsible for Google's existing communications services, such as Project Fi wireless services, Google Voice calling services and WiFi networks at Starbucks stores.
Some research reports predict that by 2035, the aircraft broadband service market will reach 130 billion US dollars. However, it is unclear how much Google is willing to acquire Nokia's aircraft broadband business at a high price.
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