Apr, 2015

Google Project-Fi: Is it a direct threat to Telcos

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Google is already an Internet Service Provider and a pay-TV operator. Now it’s expanding to become a wireless carrier as well.

Google Project Fi

Google Project Fi – Now a wireless service provider too

Google unveiled this past Wednesday its Project-Fi which just marked its dawn into the wireless service provider arena. So Google started with being a search engine, then Ads, followed by email services, then ISP, then TV and now a virtual telco (wireless service provider). This effort from Google taps three networks: LTE networks from Sprint and T-Mobile along with a heavy dose of Wi-Fi.

Here’s what we know so far:

  • It’s called “Project Fi”
  • It’s for Nexus 6 owners only, at first.
  • It’s invite only right now. You can sign up for an invite here.
  • It’s built on top of Sprint and T-Mobile’s networks
  • No contracts
  • Subscribers pay $20 for unlimited talk/text, and then pay $10 per gig of data. So a 3GB plan would be $30 on top of that $20, coming out to a total of $50.
  • You only pay for what you use, but in sort of a strange way: if you pay for 3GB of data per month ($30) but only use 1.5GB, you’ll get $15 back at the end of the month.
  • t’s all tied into Google Hangouts, which will allow you to place calls from your number on any Hangouts-enabled tablet or laptop in addition to your phone.
  • WiFi Tethering is included.

Also the coverage heat maps looks like the following so far in the U.S:

US Coverage of Project Fi

There are a few benefits for Google. First, anything that gets people online more helps Google’s core business of serving up ads. Second, the service works only with Android and, specifically, Google’s own Nexus 6 phone. That means that to take part, customers are signing up for the most Google-y of all mobile options — its phone, its operating system, its online services and its wireless plan. A logical argument that can be made here is that yes it make alot of sense for Google to venture into this area which is fine but why are the Op-cos interested and joining hands with Google on this front. A simple and quick answer to this is that T-Mobile and Sprint, the two cellular networks participating, are both challengers seeking to fill their networks with as much capacity as possible. Both already have big programs in which they wholesale their service to lots of other so-called MVNOs, or mobile virtual network operators — companies like FreedomPop and Republic Wireless that offer mobile service under their own brands but use another company’s network. Economically, this deal is likely similar to those, albeit this time with an Internet giant rather than a mobile upstart.

Google is adding to the notion that the carriers are simply interchangeable pipes. Project Fi will automatically connect to more than one million free Wi-Fi hot spots if those signals are available, Google said in a blog post. If not, it will choose either Sprint or T-Mobile’s networks, switching between the two depending on which it determines to be the best at the time. Google has signed deals with both.

Here are some charging related details of the Google Project Fi Data Plans:

Google Wireless Data Plans

Google Wireless Data Plans

The wireless project is the latest example of Google spreading its wings beyond its highly profitable online search-advertising business, particularly into Internet access. Google’s broader goal is to encourage people to use the Internet more often and especially its own services.

Source: WSJ



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