Yet another new from Google: Project Fi
Here goes Google again’ it has announced its wireless subscription service!
For now, if you own a Nexus 6, you do not need to take telephony services from AT&T, Verizon or T-Mobile. You can use Google’s wireless carrier services and pay as you go. No annual contract, no network switching, no international roaming; simple pay as you go telephony service for $30 a month.
OK, not an absolute $30 per month; like all other carriers, this plan also comes with riders. Talk or text up to 1GB for $30 per month, then pay $10 per GB. Traditionally, users pay over $100 to AT&T and Verizon for a month for their services, including phone calls and mobile data.
And the pricing is not the best part yet. Here is the best - Google has partnered with Sprint and T-Mobile as of now. Google has saved on billions of dollars in creating its own wireless infrastructure. It is reported that Google will pay these partners $2 per GB, as mentioned by Kevin Smithen, Analyst, Macquarie Securities). However, Google has not officially commented on its cost structure.
Google’s mobile network will connect you to the best service available in your range be it Sprint, T-Mobile or a simple Wi-Fi connection. Google services will jump from one network to another, whichever has a better reception. So, Google Project Fi is a mobile virtual network operator (MVNO) for Sprint and T Mobile. For now, the services are on an invite only basis. You can ask for an invite at the signup page of Google Project Fi.
The salient features of the plan are as follows:
- Pay $20 for voice, text, Wi-Fi tethering and international coverage in 120+ countries.
- Pay $10 for 1 GB data, with additional data at $10/GB.
- For now, you need Nexus 6 phone, which costs $649 to $699.
- Any unused data value will be credited back to your account for the next month.
This initiative of Google is to reinvent the telephony services to overlap the ever increasing plethora of devices and services that it offers. This will sure take the mobile business a step ahead to provide telephony services. Google has already been an internet service provider with its Fiber Internet service that it provides to the Kansas City area and Austin, Texas as of now.
At present, Google is riding on the physical networks owned by other providers. This definitely creates a market entry barrier for Google and limits its competitive advantage over traditional careers. But, Google has the tendency to cut short the middlemen eventually that stand between the company and users. We have seen this in the case of Internet Service Providers, online stores and delivery businesses. Google already has its VoIP services called Google Voice which allows users to get a Google phone number and make calls through Gmail or Hangout via Wi-Fi. For now, only thing Google does not have are the cell towers. Only future can tell how Google will overcome this hurdle.
There are some other serious hurdles in the way for Google.
Its partners, T-Mobile and Sprint have been very cautious about this deal. According to Wall Street Journal, Sprint has put a usage cap in its contract that allows it to renegotiate the terms of deal if Google signs up, over a particular number of customers. As per analysts, in 2018, Google may have to pay Sprint $750 million and T-Mobile $250 million for its services. So, for now, Google’s plan should work fine by not directly tackling the four big service providers in the US. Google will make money on Android through licensing, apps and search services. This will also give Google direct access to customers. However, like as it is apparent, there are risks involved. Being a wireless carrier, Google will have to face the wrath of customers if there is a deficiency in service. Customers are not going to blame Sprint