Google Releases Details on Wi-Fi-Based Phone Service

Google said it's launching a low-cost wireless phone service, in cooperation with Sprint and T-Mobile, in what it is calling Project Fi. The service is initially by invitation only and requires users to buy the Google Nexus 6 phone, which retails for $649 for a 32 GB handset, $699 for 64 GB. The handset is manufactured by Motorola Mobility. Google rolled out the announcement Wednesday on its blog. Under terms unveiled Wednesday, a subscriber gets basic talk, text, Wi-Fi tethering and international coverage for $20 a month. Subscribers also pay a flat $10 per 1 GB per month, but receive credit for unused data, Google said. Google doesn't require an annual commitment but also doesn't have the family plans offered by most carriers. “Similar to our Nexus hardware program, Project Fi enables us to work in close partnership with leading carriers, hardware makers, and all of you to push the boundaries of what's possible,” Google said. “By designing across hardware, software and connectivity, we can more fully explore new ways for people to connect and communicate.” BTIG analyst Walter Piecyk sounded a note of skepticism. “Google should either write Sprint or T-Mobile a large check for future capacity to help accelerate network buildouts, partner with them in the upcoming incentive auction or just buy one of them,” he wrote. Piecyk also said the Google service isn't necessarily cheap compared with the family data plans offered by the major carriers. The Google phone will also default to Wi-Fi, he said. “So if T-Mobile is offering blazing fast speeds in [New York City] that top the WiFi hotspot that is closest, the user will be stuck on the slower WiFi,” Piecyk said. “In our experience, which we regularly tweet about, that often results in inferior speeds that do not even enable mobile video of [Netflix] or YouTube.” The announcement wasn't a surprise, since details of Google's mobile virtual network operator launch “have been discussed for months,” wrote Wells Fargo Securities analyst Jennifer Fritzsche. “Since the service will not be available on the iPhone or smaller Android devices, we expect the initial impact to be fairly limited.”