On Wednesday Google (NASDAQ: GOOG) unveiled Project Fi, its own wireless network.
Users with a Nexus 6 phone can subscribe to Project Fi’s $20/month plans which allow for basic calling and texting. Data comes at a flat rate of $10/GB. While the service is only open to users in the US, Google says Fi will work in 120+ countries with no roaming fees. Every month the unused data is credited back to the account.
For now Google is simply an MVNO, mobile virtual network operator, with Project Fi using the towers of existing telcos. Project Fi will also use a database of free wi-fi hotspots where available. If more bandwidth is available via the hotspot it will use that instead of the cell network, or vice versa when 4G LTE is available. Google also promises seamless transition between the networks for calls.
Google’s disruptive force
Project Fi has a long way to go before it becomes as much of a disruptive force to mobile telcos as Google Fiber is for ISPs.
First, Google needs to expand the service beyond the Nexus 6 to the entire Nexus line and eventually the Android ecosystem as a whole. Google is probably just testing the service with Nexus 6 users, but a rapid device expansion is required for the service to properly take off. If this service was available on low-cost Android devices, it would truly be competitive.
Next, Google needs to start building its own infrastructure. It will always rely on other carriers, but it can’t be entirely reliant. Google certainly has the capital on hand to do this, and having its own cellular network would open up future possibilities as well.
Google’s entry into the market will be welcomed by consumers and feared by competitors. Google Fiber is reshaping the ISP market in the US, and there’s no reason why Google Fi can’t do the same for mobile operators.