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Google Launches Project Fi Group Plans

By Evan Niu, CFA – Oct 11, 2016 at 2:29PM

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You can bring your friends and family now -- if they have a compatible device.

Google's new Pixel family. Image source: Google.

What happened?

A week after unveiling its new Pixel phone, Alphabet (GOOG 3.84%) (GOOGL 3.65%) has introduced family plans for its Project Fi hybrid cellular network. After the first line that costs $20 per month, additional lines can now be added to a Fi account for $15 per month. Customers can add up to five people to a group plan.

The basic Fi plan includes unlimited talk and text, and unlimited international texting. Data can be purchased in 1 GB increments for $10 per GB, and Fi's signature pricing strategy of crediting back unused data at the end of the month remains.

The search giant is also taking the opportunity to discount older Nexus 5X and 6P devices.

Does it matter?

Group plans are incredibly important within the domestic wireless industry, not only because they drive an account's monthly bill higher, but also because they significantly reduce the chances of defection. It's just a lot harder for a family to move multiple lines over than it is for an individual to move one line.

At the same time, discounting the aging Nexus inventory makes sense as Google focuses its marketing efforts on the new Pixel as a flagship device, the first phone that Google has ever completely designed on its own. For now, Project Fi remains a niche service offering due to limited hardware compatibility (only Google's Nexus and Pixel phones), so the innovative model barely has any reach at all.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Evan Niu, CFA has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A and C shares). We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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