The fight for mobile phone network supremacy is fierce, and the latest battle is being waged over unlimited data. The latest to offer it? Alphabet's (GOOG -1.10%) (GOOGL -1.23%) Google Project Fi phone service.
Undercutting the big boys
Project Fi is a mobile phone provider piggybacking on the T-Mobile, Sprint, and United States Cellular networks, using whichever one offers you the best coverage at the time. The company operates in a fashion similar to others -- selling phones, plans, and accessories -- with the exception that it's all online.
In the last couple of years, growth in the number of new subscribers to wireless services has slowed down. That is especially evident at the biggest providers, Verizon and AT&T. Smaller competitors like Sprint and T-Mobile have undercut prices to lure away customers, as have a number of other small upstarts also piggybacking on bigger networks, like Google Fi is doing.
And now, the fight over the limited number of mobile phone users has taken a new turn: All the focus has turned to unlimited use of data. With 4G networks, telecoms have begun to look like traditional internet service providers (ISPs), and as a result consumers have begun to rely on them for internet access.
|
Unlimited Data Service |
Starting Cost |
Other Perks |
|---|---|---|
|
Google Fi |
$80 |
No contract; text and data use internationally at no extra charge. |
|
Verizon (VZ 0.90%) |
$75 |
Verizon's best-in-class national network, unlimited mobile hot spot. |
|
AT&T (T 1.10%) |
$90 |
Free HBO and $15 a month off a DirecTV bill. |
|
T-Mobile (TMUS 0.92%) |
$75 |
Free in-flight texting and one hour of data and free Netflix. |
|
Sprint (S) |
$65 |
Free Hulu account and unlimited high-definition video streaming. |
Data sources: Company websites.
Google's Project Fi is the latest to undercut the industry leaders with an unlimited plan. Its data is priced at $10 per GB, but capped at $60 a month, and unlimited talk and text at $20. So if customers use less than 6 gigs of data per month, their bill will be less than the quoted $80 a month. Though Verizon and AT&T have been able to stave off the assault, the battle could have long-lasting repercussions for the industry overall.
Image source: Getty Images.
How it could affect the industry
The latest move by disruptive Google is another reason for the mobile industry to sweat a little. The heavyweights have released their own unlimited plans, cut prices, and begun offering new perks like video streaming and international calling.
However, Google's move helps cement the idea that unlimited data is now the norm. That pushes telecom even further into the world of ISPs. The cutthroat scheming to steal market share has also set off a long-term trend of pricing depreciation for 4G service. That's great news for consumers; not so great for telecom and its investors.
There is some silver lining, though. That extra competition means innovation is alive and well. For the industry leaders like Verizon and AT&T, that means leading the charge into the next-generation 5G network, which should be available in limited markets by the end of 2018. Having the "best" network and offering the most perks will only go so far. A marginally "worse" network coverage plan with no contract and competitive pricing like Google's will win out over time unless a more technologically advanced up-sell exists.
Should mobile network leaders worry about Project Fi? Probably not yet, as this isn't the first phone plan to undercut them. It does add further reason to hasten 5G, though. Verizon has already begun to monetize its services in new ways, and getting to 5G sooner rather than later could be a real game changer. Meanwhile, consumers can reap the benefits of getting more for less thanks to companies like Google.
