Verizon Wireless is one of Google’s most important customers in the US, distributing more Android handsets than any other telecommunications firm. The position of power currently enjoyed by Verizon Wireless may be exposed as insubstantial if Google, the most popular search-engine provider and one of the biggest companies on the planet, chooses to pick a fight with the firm. Will Google stand up to Verizon Wireless following accusations of foul play over Google Wallet?

History suggests that it might, but logic predicts otherwise. In 2008, Google lobbied the Federal Communications Commission with the aim of shaping the open-access framework of Verizon Wireless’s 4G spectrum. As high speed internet access and data transfer continue to be rolled out across the US for 4G enabled devices, Verizon Wireless has stolen a march on its fiercest rivals. Though AT&T has raised eyebrows by exceeding its targets for 2011, the firm can boast fewer than half the number of 4G-connected customers in the States than Verizon Wireless.

Google, therefore, is enjoying considerable success with Verizon Wireless on the 4G network in a market that is saturated with Android devices. Such a privileged position may prompt the search giant to favour a ‘don’t-rock-the-boat’ policy over Google Wallet, which Verizon Wireless has excluded from its versions of the Galaxy Nexus, apparently after submitting a request to Google.

If Verizon Wireless did request to omit Google Wallet from the Galaxy Nexus, there is arguably no case to answer; tension between the firms can hardly be established on the basis of one company making a polite request to the other. According to sources within the firms, the reason why Verizon Wireless has excluded Google Wallet from one of its latest smart phones is simply that it requires that the application be integrated with hardware security features.

In fact, Verizon Wireless has not, strictly speaking, excluded Google Wallet from the Galaxy Nexus. It has merely disabled or turned off the application while engineers and developers from Google and Big Red integrate functionality with the requisite hardware-authentication protocols. Suspicion abounds, however, that Verizon Wireless is breaching the terms of the open-access requirements established by the Federal Communications Commission in 2008 by delaying Google Wallet while it continues work on its own payment engine, Isis. Could Verizon Wireless be attempting to limit the competition posed by Google Wallet or might both companies be hoping to collaborate on a single or integrated payment engine?

Whatever the reason Verizon Wireless has sought to block Google Wallet on the Galaxy Nexus, the bigger questions for the time being remain focused on Google. Why has the world’s leading search-engine company chosen to sit on the fence over Google Wallet? It is a payment platform that could revolutionise the way people buy physical and non-physical goods in stores.

The answer might that Google is collaborating with Verizon Wireless or that it views the latter as too important a customer to pick fights with over next-generation apps. Should continue to sit on the fence over the issue? It would be unwise for Google to act too early if it intends to wage war with Verizon Wireless. Its reluctance to act may not be disadvantageous, either, especially if integrating Google Wallet with hardware security produces a more robust, secure payment engine.

What is clear is that mobile-payment engines are likely to grow in prevalence as high speed internet networks are established for more customers. In future years, most users will connect to 4G networks and more people than ever will own smart phones. If Google Wallet is to take off in any shape or form, it must have the backing of the leading carriers. Android is the most popular mobile-operating system in the world at the moment and Google will want to cash in on the mobile-payment industry if and when it takes off. Until such time, Google is probably right to wait and further develop Google Wallet. Entering a burgeoning market with an insecure and underdeveloped payment engine would prove far more costly than appeasing an important business partner in the short-term.