For select users, Google's (NASDAQ:GOOGL) (NASDAQ:GOOG) Project Fi is available. For the unfamiliar with the service, it is Google's push into becoming a mobile carrier. The company partnered with T-Mobile and Sprint, using their infrastructure and buying unused capacity to become a mobile virtual network operator, or MVNO. Not only does Google provide the operating system -- Android -- and hardware -- the Nexus 6 -- now the company provides the actual network.
Google's neither the first MVNO, nor will it be the biggest MVNO. Boost Mobile, Consumer Cellular, and TracFone are a few of the more recognized names. The benefits are generally a lower bill, while the negatives tend to be device selection and limited coverage. And like these competitors, Google's service exhibits both advantages and disadvantages. Here's the good, the bad, and the ugly of Google's Project Fi.
The Good: The Fi Basics Package
Perhaps the best part of Google's service is the low-cost Fi Basics package. Google decided to break apart data from talk and text in its pricing structure and offers unlimited domestic talk and text, unlimited international texting, and 120-country coverage for just $20 per month. When compared to other MVNO's, $20 per month for unlimited calling and text is a strong value proposition. For a brief comparison, Consumer Cellular charges $20 per month for 750 minutes of talk and Boost Mobile charges $35 for unlimited talk and text but does include 1GB of 3/4G data.
The Bad: Data Costs
The most hyped feature of Google's Fi service is its data policy, but it also may be the most overrated. The company's data pricing plan is simple: $10 per month for each GB and you only pay for what you use. Initially, the company will ask you to assume your data usage but will credit your following bill in the monetary amount of your unused data. It isn't as if this is bad per se, but there are some drawbacks in data that you'd expect Google to focus on.
First, there is a lack of an unlimited data option. As a company whose business model is based upon the growth of Internet accessibility, the unlimited data omission is striking. Not only that, $10 monthly per GB of data isn't particularly cheap. Right now, Verizon's single-line More Everything plan charges $10 per additional GB for 1GB in its 2GB-4GB versions, but becomes cheaper per GB as you add more data. Also of note is this is Verizon's pricing, a company whose response to customers that want cheaper plans is to essentially tell them to go away.
The Ugly: Device selection
The biggest limitation for Google's service is the lack of device selection. Right now, the service is only available to Nexus 6 users. The phone is well reviewed, but isn't as popular as Apple's iPhone line or Samsung's Galaxy line. However, the phone carriers a large price tag -- the 32GB version costs $649. Not only that, there are no device subsidies for Project Fi users, nor are there any reimbursements for leaving other carriers.
To be fair to Google, the company is partnering with both Sprint and T-Mobile and notes only its Nexus 6 phone has the necessary Project Fi SIM card and circuitry to take advantage of both carriers. That could change in the future as Android device makers work with the OS giant in order to expand Project Fi device selection. That will probably require the service to substantially grow subscriber numbers and/or interest, however, something that might not occur.
Jamal Carnette owns shares of Sprint and Verizon Communications. The Motley Fool recommends Google (A shares), Google (C shares), and Verizon Communications. The Motley Fool owns shares of Google (A shares) and Google (C shares). Try any of our Foolish newsletter services free for 30 days. 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.