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​Google’s Project Fi: Implications for the Wireless Market

Posted by on May 14, 2015

Google Fi

The so much talked-about Google's, "Project Fi" is out. It is a new MVNO, which gives telephony consumers more options and the MVNO players, more competition; Beyond these, what are the implications for the American wireless market? 

Can it serve as a signal booster for the wireless service consumers?

What’s MVNO?

This stands for Mobile Virtual Network Operators; they are businesses that resell wireless services to consumers without owning a wireless infrastructure. Just like the resellers stuff - you get some nice deal from producers and add values and resell to final consumers; very smart business, right?

Its the value that each MVNO brings to the table for consumers that they use to outsmart competition. The more innovative they are, the more awareness they generate and the more they are able to sell to end users.

What does Google bring on the table with its Project Fi?

Let us quickly see what Google is offering in comparison with what is already in place. Let us see if this is all good for the market or it is just another “me too” service that would soon join the army of MVNO providers in the market.

Project Fi Service

The project is starting with the Nexus 6 Smartphone and will run on the Sprint and T-Mobile networks; it will use Wi-Fi to place calls and texts. The phone comes with Software that allows for seamless connection to network with the better signal and switching between Wi-Fi and 4G LTE networks.

Additionally, Project Fi is offering cloud domicile for the phone number and this has the advantage of uninterrupted access to your phone number even if the phone is lost. This means you can place and receive calls and send texts message via your pc or tablet.

Project Fi Costs

The service costs $20 per month to talk, text, and do Wi-Fi tethering with access to coverage in 120+ countries. It will charge $10 per Gigabyte flat rate on data usage on monthly basis; Therefore, if you bought 4GB of data, you will pay a total of $60 monthly ($20 for talk and text plus $40 for 4 GB of data allotted).

The major difference with Google's plan is that Google is offering a refund on unused data. These funds would be credited to your account and be available to repurchase data for the following new month.

With the $20 per month paid, which is inclusive of taxes and fees, you will get cool access to about 1 million U.S. Wi-Fi hotspots and unlimited domestic voice and texting. You also get unlimited international texting and low-cost international calling in more than 120 countries.

In the event that you have unused data, the fantastic part is that you get a refund for it, so you only end up paying for what was used - No cheating! Technically, every other Carrier in history worldwide has been cheating consumers by making them pay for data usage - Even excessively of used above allotted data, but never refunded for unused data. Now go figure why no one complained how unfair this has been all along!  

What are other MVNOs offering you?

Let us see what other MNVOs have and how these compare with Google’s Project Fi. Maybe Project Fi is after all a big fuss due to Google's might to raise awareness of its existence on a whole new level with no savings for you. Or it has got lots of juice to save you money and give you incredible value in comparison to other MVNO offerings?

Industry watchers have praised Google’s model in comparison with existing MVNOs as innovative but are faulting some key areas where Goggle did not get it right.

Pricing yes, it’s a no brainer! But there are already proposals and moves by various MVNOs to consider price adjustments and also refund unused data for following month's of usage. This is something that would give Google a run for its money.

Project Fi may be marginally cheaper for individual users than what the Tier 1 carriers offer. But a BTIG analyst Walter Piecyk notes that a family with three Smartphone lines on 6 GB of shared data on Project Fi is only cheaper than AT&T’s plan at $120 and $145 respectively.

Also, he said that plans from Verizon Wireless and Sprint at that Tier are $5 cheaper than Project Fi, and T-Mobile US is $10 cheaper.

Thus, he said a heavy data user family plans from the traditional carriers are cheaper than Project Fi.

In the area of seamless switching for better service between networks for better user service experience, Walter Piecyk sees the limitation to Nexus 6 as the biggest drawback.

Cost wise, the Google-designed Nexus 6 is about $649; this is way too costly for average mobile user and to be invited first before joining Project Fi is a bad idea, he said.

There is speculation that Google purposely limits the customers to prevent over-subscription as not to overwhelm the system. But the limiting scenario, especially the choice of an expensive android phone, clearly confines Project Fi’s target market.

Google has not said whether it would expand Project Fi to more devices. But realities on ground have clearly shown it as a project that is not out for expected groundbreaking competition.

So what exactly are the bright sides of Project Fi?

Let’s just assume Google has come to wake up MVNOs to their customer service responsibility; because really, if you are coming into a market as huge as the wireless niche and you are cutting out a large chunk of your potential subscribers, what you are doing is give a heads up to competition to fill the gap and they will surely do that!

Google coming into the market with the seamless switching model is considered a good omen for the future of quality wireless service. This is true because any provider with poor service in the game will not get as much income as those with better services.

Therefore, Google has nudged them to do something about quality of service and improve cell phone reception speed for better phoning experience.

The future looks promising for more entrants as this is a clearer business model which many can tweak to get better. The competition definitely will be intense as time goes by.

Overall, it is a lucky day for consumers, even though the present Project Fi model has completely alienated a large chunk of them. The opportunity and competition presented by the model would for sure help to get some extra money into their pockets - Refunds for unused monthly allotted data!

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