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Will Google emerge as a wholesale Internet capacity supplier to mobile service providers operating over wide areas in the southern hemisphere? It seems possible, indeed likely.

Google’s Project Loon, testing use of free-flying balloons to provide Internet access in the southern hemisphere, is testing such balloon-based access with Vodafone New Zealand, Telstra in Australia, and Telefónica in Latin America.

In tests, mobile operators using Long Term Evolution send traffic from cell towers to Google’s balloons, which act are signal relays, sending LTE-formatted signals directly to smartphones and other mobile-connected devices on the ground.

Signals also can be sent from one balloon to the next, increasing the coverage area. Any single balloon can cover an area of about 50 square miles.

Those tests are not yet a fully-operational network, so there are no long term commercial agreements yet in place. Still, the obvious model is a partnership where Project Loon provides wholesale capacity to mobile operators.

It is one more example of the ways Google is branching out within the Internet ecosystem, taking on new roles and functions. In the case of what could happen with Project Loon, Google will be a wholesale backhaul provider and a wholesale provider of local access for partner mobile operators.

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