Google announced on Wednesday that it is venturing into the wireless business by offering a service called “Project Fi.”
Essentially, Google is using the Sprint and T-Mobile networks to provide wireless access to users of Google Nexus 6 phones.
That means that service will be limited, but the real news here is that Google is offering the service with a novel pricing scheme in which customers only pay for the data that they use.
Here’s how Google explains it in a blog post:
“For $20 a month you get all the basics (talk, text, Wi-Fi tethering, and international coverage in 120+ countries), and then it’s a flat $10 per GB for cellular data while in the U.S. and abroad. 1GB is $10/month, 2GB is $20/month, 3GB is $30/month, and so on. Since it’s hard to predict your data usage, you’ll get credit for the full value of your unused data. Let’s say you go with 3GB for $30 and only use 1.4GB one month. You’ll get $16 back, so you only pay for what you use.”
As The Wall Street Journal sees it, the new pricing scheme has the potential to disrupt the industry. Here’s what one analyst told the paper:
“‘While Google may not be targeting huge numbers of subscribers, their entry into this market is very important, because it has the potential to disrupt the wireless industry in much the same way Google Fiber prompted changes in the cable and broadband industries,’ said Rajeev Chand, head of research at Rutberg & Company, an investment bank focused on the mobile industry.
“Google Fiber offers broadband Internet service to homes that is roughly 100 times as fast as the U.S. average. It is only offered in a handful of cities, but it has prompted rival broadband providers such as AT&T and Comcast Corp. to speed up their own Internet services.
“Google’s wireless project has been in the works for roughly two years. It is part of a broader effort by the company to make it easier for people to access the Internet. As more consumers and businesses get online, they are more likely to use Google services like search, YouTube and work applications.”
It’s worth noting that according to Mobidia, a mobile-analytics company, the average U.S. mobile subscriber uses 1.8GB of cellular data each month.
As we’ve reported, with this new plan, Google joins other companies that “already operate as mobile virtual network operators, or MVNOs, such as Ting, Tracfone, and Republic Wireless, that have proliferated in recent years.”