Google's new wireless service could propel industry changes

Google waded into the wireless business, introducing a service called Project Fi that champions better connectivity and lower rates for mobile-phone users in the United States, even if it won't make much money.

Google's most intriguing innovation is what it calls its "network of networks" enabling phones to automatically tap into the strongest signal, be it a free Wi-Fi hotspot or the cellular towers of the two carriers, Sprint and T-Mobile, that Google has partnered with in a bid to challenge behemoth carriers Verizon and AT&T.

That technological advancement — and Google's pricing plan, which pays users back for data they don't use — could spark long-term improvements in wireless service but probably won't upend the industry.

"Google's angle seems more aimed at driving change than dollars," said Colby Synesael, an analyst for Cowen and Co.

He said Project Fi's greatest impact — and Google's likely intent — will be that "other carriers will start to mimic certain aspects of the service."

Those services include automatically connecting to about a million free Wi-Fi hotspots, encrypting calls, making phone numbers "cloud-based" so they can be used on any Internet-connected device and allowing customers to make Wi-Fi voice calls.

Among the new service's most enthusiastic boosters was one of Google's partners, T-Mobile chief executive John Legere, who wrote in a blog post that "anything that shakes up the industry status quo is a good thing."

"The carriers have dug in their heels and held U.S. wireless back for too long," Legere wrote. "This industry needs all the fresh blood and fresh thinking it can get."

But Project Fi will be available only on Google's Nexus 6 smartphone, a limitation that hampers its effect on the wireless marketplace.

"For now, you have to have a $649 Nexus 6, which I think will keep a lot of people from using it," said Derek Turner, research director at consumer advocacy group Free Press.

But Google also has a reputation for transforming small-scale experiments into industry-altering advancements. Its high-speed Internet business, Google Fiber, had a clunky start but propelled enough consumer excitement to scare rivals such as Comcast into introducing faster connections.

The number of Americans who carry the Nexus 6 phone is "minuscule," less than 1 percent of all Android smartphones sold, according to Stephen Baker, vice president of industry analysis at The NPD Group, based in New York.

That makes Project Fi more of an experiment than a real business venture, he said.

"It's a really small impact," Baker said. "It's a demonstration of what people can do, what the technology can do, as opposed to a new business that's going to undercut the carriers."

"It's a baby step ,and hopefully more things like this will catch on," said Turner, of Free Press. "If that model is adopted by the carrier partners that Google is using, and further adopted by the primary carriers, that's great news for consumers who will be using what they pay for."

The service is so far available by invitation only. Those who express interest on Google's website are told they will get a response within 30 days. The earliest invitations will go to consumers based on the network access in their ZIP code and how ready it is for the new service.

A map on Project Fi's website shows that connections will be available in most urban and suburban regions of the U.S., with gaps in rural areas.

How project fi works

You'll need a Nexus 6 phone, available at the Google store, and you'll have to request an invitation to participate at fi.google.com. The company will let you know within 30 days whether Project Fi is ready for service near you.

Once you're in, here's how it works: 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. San Jose Mercury News