Google joins startups in evolving phone carrier market

Dillon Zizza, Webmaster
Originally published June 2, 2015

Google makes a lot of products, from their search engine to the Chrome web browser to the Android operating system. Now they have entered the mobile phone carrier market with the launch of Project Fi.

Project Fi is different from traditional carriers in many ways.

Firstly, Project Fi does not use a network of its own. Instead, it combines coverage from T-Mobile, Sprint and available Wi-Fi hotspots to compile a unique network that should have strong coverage in any major city in the country despite not using the “big two” networks of AT&T and Verizon.

This innovation does come at a cost; currently only the Nexus 6, the latest entry in Google’s in-house phone brand, has the antennas necessary to simultaneously handle the multiple types of network technology used by T-Mobile and Sprint.

The Nexus 6 is widely regarded as a high quality phone, but it does cost upwards of $650 to purchase outright, or $27 a month for two years when financed straight through Project Fi, putting its pricetag around that of the latest iPhone or Samsung Galaxy.

The price of Project Fi, on the other hand, may be quite appealing. Unlike conventional carriers, the plan operates on a scaling price scheme, costing $20 a month plus $10 per gigabyte of data, with a refund offered for any data paid for but not used.

Depending upon data demands, this could work out to be substantially cheaper than a contract through a major phone carrier, even with the additional monthly cost for a financed Nexus 6.

Of course, being a Google-made service, Project Fi is not likely to be friendly to Android’s iPhone and Windows Phone competitors anytime soon, and those who want to bring their own non-Nexus 6 Android with them are also out of luck for the time being.

However, Project Fi is not the only offering in this field. Recent years have seen many others of these small-scale providers, known as prepaid carriers, arise, typically offering substantially discounted prices compared to the typical two-year contracts.

All major carriers except for Verizon own their own prepaid options. Sprint has both Virgin Mobile and Boost Mobile, AT&T has Cricket Wireless, and T-Mobile has MetroPCS and GoSmart. To further complicate matters, Verizon, AT&T and T-Mobile also offer different non-contract plans under their own brand. Beyond them there are dozens of third-party options, such as Ting, Page Plus, TracFone, StraightTalk, Republic Wireless, Simple Mobile, Red Pocket, Net10 Wireless, Freedom Pop, H20 Wireless and Brightspot Mobile.

Sorting through these options can quickly become overwhelming and confusing, but those who persevere can find some quality deals in the mix.

The vast majority offer cheaper equivalents of the traditional monthly fee for an allotment of minutes, texts, and data model.

More interesting are those that seek to change the typical model as Project Fi does.

Ting allows customers to pick how many minutes, texts, and megabytes of data they want on a month-to-month basis.

Freedom Pop gives 500 megabytes of data, 500 texts, and 200 minutes monthly for free, with the option to upgrade to paid tiers.

Republic Wireless offers a $5 a month wifi-only option for those who only need a home phone, as well as the ability to make calls and texts over wifi even on their plans that use the mobile network.

For all of their advantages, prepaid and non-contract carriers do come with some downsides.

Customer service can be lacking, especially compared to the massive call centers and numerous stores the big four carriers maintain.

Coverage can be inferior as well, since some non-contract options lack roaming support or are on networks such as T-Mobile and Sprint that are less well established outside of major urban centers.

The biggest drawback likely comes from the phone selection.

A contract carrier such as, say, Verizon, charges their customers a set amount each month for their phone, essentially financing the cost of the device to spread it out over two years, making the total cost much more palatable.

Prepaid carriers, on the other hand, require that all phones be bought outright, making choices such as the latest iPhone or Samsung phone cost upwards of $700, an amount that is out of reach for many people.

Thankfully, the market for cheaper phones has grown substantially now, and options like Motorola’s Moto E and LG’s L90 can provide plenty of performance for around $100.

These initiatives, along with Project Fi, which has the added advantage of being backed by Google’s immense marketing prowess and influence, have the potential to change the mobile phone market, an industry that is currently dominated by a few very large corporations.