Last week (April 22), Google announced its entry into the wireless carrier business with its "Project Fi" service.
"The prices are attractive. In general, users will pay $20 per month for the service, plus $10 for every gigabyte of data they use," wrote VentureBeat's Mark Sullivan.
"Fi will be available in most U.S. cities, but only on the Google-designed Nexus 6 phones for the time being. And new customers must be invited to sign up in the introductory phase of the service."
$20 a month for wireless service, plus $10 per gig of data? That is a good deal.
This is a fair market price and one that Google can make a lot of money with. If you look at other parts of the world or other services, data rates are much cheaper than what we pay in North America.
I have traveled in Europe, Asia and South America and purchased gigs of data for prices around what I would spend on a visit to Starbucks. Even when I have traveled in the U.S. and used options like Roam Mobility, they offer a gig of data for comparable rates to this. The Google Fi offering also uses a combination of many wireless technologies, which is likely a more efficient use of Google infrastructure.
But let's be clear. Google Fi is very disruptive to carriers' current business model.
But make no mistake, Google Fi isn't just a friendly entry into the marketplace. It is disruptive. Google is content with reducing existing carriers to a “dumb pipe,” something we’ve blogged about in the past. This type of technology, along with the "SIM-less" technology, and the Apple ID route that Apple is taking are going to be very disruptive.
People already make way fewer voice calls compared to just a few years ago. When we phone someone, we rarely dial their number if we have them in our phone. Contacts include phone numbers, emails, Apple IDs, Facebook contacts, etc. As we move to a scenario where networks are data driven and there is no long distance, phone numbers literally don’t matter. My number can be my number anywhere on the globe and I could use an email address instead. When this happens, your phone number can be hosted by anyone. Players like Google and Apple are likely to own or else link your number to you -- all you need is access to the network (i.e. the Internet).
In a world with less voice dependency and a greater emphasis on messaging (iMessage, WhatsApp, Facebook, etc.), Google Fi is part of a natural, data-centric progression.
I feel like this new scenario will succeed in part because it is just natural progression. This is simpler and better for users and makes economic sense. Our spectrum allocated for voice networks could be reallocated for data. I think this is coming and carriers are going to need to plan for it. Carriers will still make money in these scenarios, but they are likely to become local network partners and retailers. As we become a more global civilization, we are going to want to be part of the bigger network. Those who travel will want their devices to just work the way they do at home on foreign networks. These are exciting times with lots of opportunity. Change is good for those who embrace and shape it.
For now, as previously mentioned, Google Fi is only available on Nexus 6 phones (obviously because Google has complete control over the design, manufacturing and sale of these phones). I expect that Google will release the specification that it would like manufacturers to create to support this technology. It's only a matter of time before other phones on the market will support this method of handoff.