Game On: Will Google Wireless Service Crank Up Price Pressure on AT&T, Verizon?
Google (GOOG) confirmed its long-rumored move into telecom, kicking off its own wireless service built on Sprint’s (S) and T-Mobile’s (TMUS) networks with a market twist by adopting a consumption models that allows users to pay only for data used each month.
Google is calling it “Project Fi,” and positioning it as a “program to explore this opportunity by introducing new ideas through a fast and easy wireless experience,” as Nick Fox, Google Communications Products vice president, wrote in a blog post.
“As mobile devices continually improve how you connect to people and information, it’s important that wireless connectivity and communication keep pace and be fast everywhere, easy to use, and accessible to everyone,” he said.
Word emerged in late January the search giant had signed reseller deals with telecoms Sprint and T-Mobile, the third- and fourth largest wireless carriers, to sell wireless service directly to end customers in rebranding wholesale deals, effectively making the search giant a mobile virtual network operator, or MVNO.
Then, in short order, more buzz surfaced that Google’s wireless service could enable users to locate the best signal from multiple carriers rather than relying on a single network to provide cellular or Wi-Fi connection.
Turns out not only was it was all true but Google’s telecom push could be disruptive enough to spark a new level of price war for the wireless industry, making for interesting next moves by rivals AT&T (T) and Verizon (VZ).
As previously reported, Google’s service initially only will work on its latest Nexus 6 smartphone. The feature that allows users to toggle back and forth between Wi-Fi, Sprint and T-Mobile’s network to find the best signal requires Google to engineer hardware and software changes that, at least for now, it can only execute on its own devices.
While Google’s MVNO or reseller partnerships with Sprint and T-Mobile are central to its initiative, Sprint is said to have closely examined the deal’s ramifications before agreeing, the Wall Street Journal reported. Both Sprint chairman Masayoshi Son and former chief executive Dan Hesse reportedly were involved in the decision and only signed on to the deal when Google agreed to volume limits and to reconfigure terms should the service grow beyond expectations.
Here’s some more details on Google’s plan for subscribers. You can view a coverage map here.
- One plan at one price with 24/7 support
- $20 a month delivers talk, text, Wi-Fi tethering, and international coverage in 120+ countries
- Flat $10 per GB for cellular data in the U.S. and abroad: 1GB is $10/month, 2GB is $20/month, 3GB is $30/month
- Credit for the full value of unused data
- Tied into Google Hangouts, enables calls on any Hangouts-enabled tablet or laptop in addition to a phone
To subscribe through Google’s Early Access Program requires an invitation, which can be initiated here.