Google is now officially in the wireless phone industry.
The Internet giant announced Wednesday it will introduce a new wireless phone service called Project Fi. The service will be a partnership with Sprint and T-Mobile, the industry’s third and fourth largest carriers, which will enable Google to enter the market almost immediately. The search engine giant will not have to build an expensive network of cell phone towers throughout the country.
Google will become a Mobile Virtual Network Operator (MVNO), and purchase excess capacity from Sprint and T-mobile, reselling it under the Google brand name. They will leverage both carriers’ networks to create a mega network that will compete with the stronger networks of Verizon and AT&T.
Project Fi may be a game changer as it will allow customers to only pay for the data they use each month instead of having to buy a packaged plan or an unlimited plan. Consumers waste an estimated $28 per month from overages or having the wrong plan, according to research from Validas, a company that analyzes cell phone plans. A cell phone plan that charges for just the amount of data used could eliminate most of that waste.
The plan’s pricing begins at $20 per month for unlimited domestic calls, unlimited U.S. and international texting, WiFi tethering and free data coverage in over 120 countries. Customers can buy an additional 1GB of data for $10 per month. And Google will send you a refund for the amount of unused data if you buy too much.
The launch of Project Fi will only include Google’s newest Nexus 6 phones. This will initially limit the amount of subscribers, allowing Google to test the configuration of the network as it wades into the wireless market.
Google has stated on numerous occasions it intends to make the Internet more accessible to consumers as part of a strategy to let consumers use more of its services such as YouTube. They have built out Google Fiber to a number of cities to provide broadband Internet access at speeds up to 100 times faster than average. The entrance of Google into the wireless market is seen as part of this strategy.