Google Wants To Be Your Cellphone Carrier - Is Project Fi for You?

NEW YORK (MainStreet) — Money talks, and Project Fi, the new cellular service Google debuted today, speaks directly to consumers' budget-starved wallets.

The service costs $20 a month for the basics -- talk, text, Wi-Fi tethering, and international coverage in more than 120 countries. From there, it's a flat $10 per GB for cellular data while in the U.S. and abroad. Google has its own version of the rollover plan: since it's hard to predict data usage, consumers will get credit paid back to them for the full value of unused data. 

Let’s review the math. An average U.S. cellular customer is said to use under 2GB of data monthly - so that bill will be $40. And it will give service not just here in the U.S., but just about everywhere you travel.

You want to know what strings are attached? But first appreciate the magnificence of the Google offering. Nobody is matching that deal, and, frankly, it is hard to see any carrier even trying.

As for the strings, they are more like ropes - thick and ungainly. First off: Google’s Project Fi will work for now only on the Nexus 6, a Motorola made phone that sells for $649 (32GB of storage) or $699 (64GB) in the Google Play storefront. It will not work on the iPhone, nor the Samsung Galaxy S6, not even on the Nexus 5. Only on the Nexus 6.

“The Nexus has not been very popular," said Ed Fox, a vice president at communications company MetTel. Not many people own one.” 

Another string: Google for now is only accepting customers from certain zip codes. In enrollment you will be asked where you live, and the process halts if Google believes it does not have adequate service there.

A third string: Project Fi is invitation only. Google is vague about the process but, right now, a would be customer asks to be put on the waiting list and then you, well, wait. It’s not clear for how long.

But it may be worth the wait.

Note: Google is not building a cellular network from scratch. In the U.S., it will buy capacity from Sprint and T-Mobile. Project Fi will also use public WiFi networks, for data and voice. Exactly how Google will shift traffic from carrier to carrier to WiFi is not currently known.

Experts, mainly, are positive about Project Fi - with yet another string attached. Doug Brake, Telecom Policy Analyst at The Information Technology & Innovation Foundation in Washington, D.C., said: “This is an interesting move by Google, but so far looks like an experiment. Baby steps before you can walk, and walk before you can run—Google’s Project Fi is in the baby step phase, and it’s unclear how far they will take it.”

For Google, uncertainty is win-win if the goal - as many analysts believe - is to prod the legacy carriers into kicking up their innovation. The exact same gambit worked for Google with its Fiber move, said Anurag Lal, CEO of Illinois headquartered Infinite Convergence. Google, he said, simply announced two pilots for fast and cheap broadband and suddenly the broadband providers were tripping over themselves to up their services. Lal expects to see likewise in cellular. “Google wants to disrupt how carriers do business,” he said.

As for why Google is limiting sign up to Nexus 6 owners, the prevailing theory is this will allow Google to control all aspects of the experience, both the cellular signal and also the phone hardware. That ups its chances of success, said multiple experts.

“This will be a spectacular service when they roll it out in full,” said George Slade, CEO of Travelers Mobile, a company that sells SIM cards to travelers for low cost foreign calling.

That of course is presupposing that Google in fact will take this plunge. It won’t be easy. “They have a ton of work to do," said Slade. "They have to make deals with a lot of foreign carriers.”

But Slade said he expected that Google - with its Silicon Valley glamor and money - will make those deals. And when the company's leaders do, said Slade, “they will put us out of business.”

He went on: “While the start may be less than optimum there is no doubt in my mind within three years, Google Wireless will be a major global service. If any company can deliver the first truly global mobile phone service, Google can.”

Written by Robert McGarvey for MainStreet

This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.

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