Google hopes its new cellular phone service will change how the entire industry does business. But that will happen only if enough consumers embrace the new service, called Project Fi. And wireless industry analysts say that’s a long shot.
Project Fi will work with only one phone, the Nexus 6, running Google Inc.’s own Android operating system. This freezes out consumers who prefer Apple Inc.’s iPhone, the most popular smartphone in the United States.
Google will use innovative technology to allow the phone to switch between two cellular networks — those from Sprint and T-Mobile— for optimal call quality. But this approach might lead to shorter battery life.
Project Fi’s pricing plan is cheaper than what the major carriers offer, but other low-cost carriers have better deals.
And while Project Fi will let users place phone calls over a network of 1 million public Wi-Fi hot spots, Google hasn’t revealed where the hot spots are located.
“I don’t really understand it,” telecom analyst Jeff Kagan said about Project Fi. “If it grows and it changes and it affects the wireless industry, it could have an impact . . . but I don’t see it yet.”
Iain Gillott, president of IGR Research, a technology firm in Austin, Texas, said Google doesn’t expect Project Fi to attract tens of millions of customers, as is typical for a successful wireless plan. Instead, he said, Google is sending a message to the biggest wireless carriers: “Keep your pricing in line. Give more value . . . behave yourselves.”
Google used the same tactic when it installed its Google Fiber Internet service in Austin. “I’ve never met anybody in Austin who’s used it,” Gillott said, but the city’s other broadband providers have improved their services since Google came to town.
The cellphone market is already quite competitive, however, with four major national carriers — AT&T, Verizon Wireless, Sprint and T-Mobile — and a number of smaller providers. Cut-rate carriers like Cricket Wireless offer a variety of iPhone and Android models.
And Project Fi’s prices aren’t necessarily bargains. Google will charge $20 a month for unlimited talk and text messages. For data, the customer pays $10 per gigabyte; if he uses less, the user gets a prorated rebate applied to the next month’s bill.
The average US smartphone user uses about 1.8 gigabytes of data per month, and so would pay around $40 a month for Project Fi. For the same amount, Cricket Wireless provides 2.5 gigs of data and drops the price to $35 for automatic payment plans.
Still, Project Fi’s plan is cheaper than those offered by major carriers like AT&T and Verizon, said Roger Kay, president of the research firm Endpoint Technology Associates in Wayland. He predicted the wireless giants are so worried about Google gaining a foothold in their business that they may cut their prices temporarily when Project Fi is launched.
“If I were those guys I would do some price response very quickly, so Google would never gain any traction,” Kay said.
Project Fi’s idea of routing calls over Wi-Fi networks is far from new. T-Mobile and Sprint already offer Wi-Fi calling with home and office hot spots. And companies such as Freedompop and Republic Wireless have offered phone calling over a network of public Wi-Fi hot spots for years. But the practice has yet to catch on with consumers. Both Freedompop and Republic Wireless say their subscribers number in the hundreds of thousands, compared with about 337 million active cellphone accounts in the United States.
Also, Google has released few details about its Wi-Fi network. The company says it will have one million free hotspots, which presumably will include the 7,000 Google already operates in Starbucks coffee shops. But outside of Starbucks, where will callers find a Wi-Fi signal? For now, only Google knows.
There’s another worry: battery life. Project Fi phones constantly monitor both the T-Mobile and Sprint networks and transmit to whichever has a better signal at a given location. But this means the phone will be constantly transmitting over two cellular radios instead of one, further draining the battery.
Motorola says battery life for the Nexus 6 with typical use is 24 hours between charges. A Google spokeswoman said company tests showed no evidence of shorter battery life. But the real test will come when consumers use the new phones in the real world.