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Broadband and Mobility

Google's Project Fi - Wireless Industry Disruption or Just Another Google Experiment?

Last week, Google finally pulled the curtain off its much anticipated MVNO wireless service.  Google calls it Project Fi.   One of the much talked about feature of the service is Google’s pricing model.  Google will only charge users for the amount of data they use instead of the tiered data pricing of the other wireless carriers.  In our opinion, Project Fi will not have a drastic effect on the wireless industry pricing. Project Fi pricing is more or less in line with the current wireless industry pricing.  In addition, carriers like T-Mobile and AT&T already offer plans that allow consumers to roll over their unused data to subsequent billing periods.   Initially, Project Fi will only be available on Nexus 6, which will mean that the impact on the wireless carriers in the short-term will be limited.

Project Fi is interesting in many other ways-the ability to automatically connect to more than a million Wi-Fi hotspots and using the phone number across multiple devices are some of the features that can enhance the user experience and can be very disruptive if Google decides to scale and expand Project Fi to include multiple devices.  The past few years have seen a number of Wi-Fi first or Wi-Fi only services launched in the marketplace. These include services from Freedom Pop, Republic Wireless, and Cablevision’s Freewheel services. However, Wi-Fi hotspots, while growing fast, are still not ubiquitous and these Wi-Fi services are useful as a supplement to a cellular data plan to reduce costs rather than a complete replacement. Google’s automatic Wi-Fi connection along with the seamless transition between Wi-Fi and cellular connections can go a long way in accelerating the growth of Wi-Fi based mobile connectivity. 

As I had mentioned in my previous post on this topic in January, Google will not be looking at Project Fi as a direct monetization opportunity and has a number of ways it can leverage its wireless service as detailed in the blog.  If and when Google decides to scale Project Fi, it will get interesting for the wireless industry and we will be watching it keenly.

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