Google unveils 'Project Fi' MVNO with Sprint and T-Mobile as partners

Google (NASDAQ: GOOG) is officially getting into the wireless business, and unwrapped its "Project Fi" MVNO in partnership with Sprint (NYSE: S) and T-Mobile US (NYSE:TMUS). The service will let customers dynamically switch between the carriers' LTE networks and Wi-Fi networks, and will also give customers credits for their unused mobile data, as had been expected.

The service will only work right now with a special SIM card for Google's Nexus 6 smartphone, which was designed by Motorola Mobility. Google said it is the first smartphone that supports the hardware and software to work with the service, and that Nexus 6 users can request to get invitations to join the Project Fi service.

The no-contract service starts at $20 per month plus taxes and fees for unlimited domestic voice and texting, unlimited international texting, low-cost international calls, Wi-Fi tethering and coverage in more than 120 countries. Then, customers pay $10 per GB of data on top of that. If users need go over their data plan Google will simply charge users at a pro-rated rate of $10 per GB, according to The Verge. At the end of the month, Google will credit users for their unused data in dollars and cents, so that users only pay for what they use (if a customer paid for 3 GB for $30 and only used 1.4 GB in one month they would get $16 back). [click to tweet]

Sprint MVNO Republic Wireless just this week announced the very same offer of refunding unused data in the form of credit.

Google said it has developed new technology that intelligently connects customers to the fastest available network at their location, whether it's Wi-Fi or an LTE network. Project Fi automatically connects users to more than 1 million free, open Wi-Fi hotspots that Google says it has verified as fast and reliable and that Google will encrypt once a user is connected.

If a customer leaves an area of Wi-Fi coverage, Google says calls will seamlessly transition from Wi-Fi to cellular networks. With Project Fi, a customer's phone number lives in the cloud, so users can talk and text from their number on nearly any phone, tablet or laptop. Users simply connect any device that supports Google Hangouts (on Android, iOS, Windows, Mac, or Chromebook) to their number.

"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," Nick Fox, Google's vice president of communications products, wrote in a company blog post. "By designing across hardware, software and connectivity, we can more fully explore new ways for people to connect and communicate."

Google will also be manning customer support for the service. "If you need help, our support team is in the U.S. and available all day, every day," the company said on its website. Keeping the service relatively simple and confined to one device at launch will likely limit customer service queries, which any MVNO needs to handle. 

Sprint reportedly secured an agreement from Google to limit the volume of traffic on Sprint's network from the MVNO and to allow Sprint to renegotiate the deal if Google's service grows too popular. A Sprint spokesman declined to comment.

"Sprint has empowered more than 100 successful MVNOs in the U.S. by delivering a unique combination of a robust nationwide network, differentiated services and operational support and we are proud to enable Google's entry into the wireless industry as a service provider," Sprint said in a statement.

T-Mobile CEO John Legere wrote in a blog post that Google is shaking up the industry much in the way T-Mobile has with its "uncarrier" moves. 

"One of the coolest things about Project Fi--IMHO--is Google's new technology that allows them to move customers between Wi-Fi and cellular partner networks based on the network that's the fastest at any given time," he wrote. "Last fall, T-Mobile led the industry in un-leashing Wi-Fi, basically turning every Wi-Fi connection in the world into a T-Mobile tower. Now, Project Fi lets customers easily access public Wi-Fi and cellular networks--there's no doubt that we share a vision that is great for customers."

Project Fi will not include all of T-Mobile's technology, like HD Voice or its Wi-Fi calling handoff, but Legere wrote that T-Mobile worked with Google so the service can offer up international roaming in more than 100 countries and destinations, "and we've shared the Un-carrier playbook for providing industry-leading customer service in wireless."

Analysts said Project Fi will likely have a limited impact on the market since it is limited in scope and experimental in nature. While the MVNO's pricing may appeal to individual users, it isn't that attractive for families with multiple lines compared to what traditional carriers offer, according to UBS analyst John Hodulik. "Expect little impact in the near-term, less clarity for the industry longer term," Hodulik wrote in a research note, according to Bloomberg.

"Google's value resides in software and search, and their most important partners in the mobile arena are the carriers and equipment makers," New Street Research analyst Jonathan Chaplin wrote in a research note. "We doubt they want to compete directly against these partners (this is not Google Fiber). Instead, they likely want to build a better service and show the carriers how it is done."

For more:
- see this Google blog post
- see this T-Mobile blog post
- see this Project Fi network page
- see this Project Fi pricing page
- see this Project Fi experience page

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Report: Google's MVNO to only run on Nexus 6, will switch between Sprint, T-Mobile and Wi-Fi networks
Google's Pichai confirms company will launch an MVNO in the 'coming months'
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