Do Google's wireless ambitions cut off carriers?

In case you missed the thousands of news articles and blogs in the last few days, the potentially game-changing Google (NASDAQ:GOOG) Phone looks to be official. This phone, the HTC-built Nexus One, has the blogosphere claiming it will give Apple (NASDAQ:AAPL) a run for its money, cause Microsoft to follow suite and generally up the ante for all mobile phone-makers. Yet, while many are excited about the hardware itself, the device’s significance lies more in the way Google plans to sell it.

There are several different rumors about how Google will distribute the phone, but none suggest it will go the typical carrier-exclusive, subsidy-driven route in the U.S. Google could be using the Nexus One to break away from carrier restrictions to distribute its own voice and data services. As such, the most commonly accepted belief is that Google will market this phone directly to consumers, selling it unlocked in the U.S. This is a risky route, considering that Nokia has struggled without carrier relationships here. U.S. consumers aren’t used to purchasing carrier-free handsets or paying the hefty price of contract-free devices. Google could subsidize the device with its advertising money, but it’s hard to say how much that’ll help.

Others believe that, if unlocked, the phone will support GSM only, giving consumers a choice between AT&T and T-Mobile. According to an FCC filing revealed today, the phone will offer HSPA 900/1700/2100 MHz abilities, meaning that T-Mobile can run it on 3G, but AT&T users are relegated to Edge speeds.

According to an AllThingsD blog, T-Mobile will support the launch of Google's phone not through a subsidy, but by pushing it through various distribution channels and lending support infrastructure. If T-Mobile supports Google in this way, the phone could be made available through T-Mobile’s “Even More Plus” plans. Nexus One owners would make up for the unsubsidized cost of the phone through a prepaid, no-contract plan for unlimited everything at $80 per month or a voice-only unlimited offering for $50 per month. Sources also told AllThingsD that Google’s decision to go with T-Mobile and use GSM came only because CDMA operator Verizon has so far declined to help the company push the new phone.

In yet another option, sources told Reuters that the unlocked version will be one of two choices for consumers — the other being a subsidized phone through T-Mobile. Even if this is the conjecture that proves true, it will create an interesting dynamic between Google and its sometime partners/sometime competitors, the wireless operators. The Nexus One could be an initial step to mobile phones that can move between networks, a long-time goal of Google’s. That means that without a contract commitment, carriers will have to get creative if they want to avoid losing customers the second a cheaper plan from another provider pops up.

Whatever Google decides — to distribute on its own, work with the GSM carriers, support 3G only on T-Mobile or offer options — it isn’t likely to be a solution that appeases all the Tier 1 carriers in the U.S. That may be okay with the software giant, but any way it goes from here, there could be some awkward tensions in the carrier world. 

E-mail me at sarah.reedy@penton.com.