Project Fi logo. Source: Google.

Google (GOOG -5.03%) (GOOGL -5.04%) is now a wireless provider.

Project Fi, Google's new wireless service, offers a number of unique and valuable perks other carriers can't (or won't) match. But at the same time, it's limited by several major restrictions.

Let's take a look at how Project Fi stacks up against the competition.

Project Fi is cheaper -- for some
The best thing about Google's wireless service is its billing policy. It's extremely straightforward and easy to understand, and for many consumers, it may result in dramatically lower monthly wireless bills.

Project Fi starts at $20 per month. That includes unlimited calls and text messages to more than 120 countries and the ability to tether the phone's data connection to a laptop or tablet (a service some other carriers charge extra for). It also supports Wi-Fi calling, so customers can use a Wi-Fi connection to make a call if they're in a spot with bad signal.

Then there's the data component. Each gigabyte of data costs a flat $10 per month. When they sign up, Project Fi customers can pick a plan they think best suits their needs -- say, 3GB per month -- but it's more for budgeting purposes than anything else. If a customer goes over their allotted data, they're still charged the base rate. Even better, if they don't use all their data, they'll get a refund for the difference.

This stands in sharp contrast to other carriers, which often encourage consumers to sign up for excessively large data allotments by charging absurd overage fees or offering oddly structured data tiers. Both T-Mobile (TMUS 0.19%) and AT&T (T 5.22%) offer some data "rollover," but for the most part, consumers are often stuck paying for data that they don't use.

For many consumers, that will make Project Fi as cheap, or cheaper, than all four major wireless carriers.

  500MB 1GB 1.5GB 2GB 2.5GB 3GB
Project Fi $25 $30 $35 $40 $45 $50
T-Mobile $50 $50 $60 $60 $60 $60
Sprint $40 $45 $50 $50 $60 $60
Verizon $45 $55 $65 $65 $75 $75
AT&T $50 $50 $65 $65 $65 $65

Prices from comparing T-Mobile Simple Choice Plan, Sprint Family Share Pack and Unlimited, Verizon MORE Everything Plan, and AT&T Mobile Share Value Plan.

But not for everyone. Google isn't offering an unlimited plan like Sprint (S) or T-Mobile, and it doesn't offer discounts for big data buyers like AT&T and Verizon. That makes Project Fi an expensive proposition for very heavy data users. If a Project Fi customer regularly uses upwards of 6GB of data per month, they'll generally save money going with a different carrier.

  5GB 6GB 10GB
Project Fi $70 $80 $120
T-Mobile $70 $80 $80
Sprint $60 $60 $60
Verizon $85 $85 $95
AT&T $95 $95 $115

Prices from comparing T-Mobile Simple Choice Plan, Sprint Family Share Pack and Unlimited, Verizon MORE Everything Plan, and AT&T Mobile Share Value Plan.

Project Fi's limitations
Those price comparisons are for single-line plans only, because Google isn't offering family plans of any kind. That's a far more difficult comparison to make, as plans vary quite drastically between providers, but unless they use very little data, families with several handsets on one account are likely better off avoiding Project Fi.

The biggest issue with Project Fi may be its smartphone restriction. Currently, it only works with a single handset: Google's own Nexus 6. It's not a bad phone (it received pretty favorable reviews when it debuted last fall), but it's certainly not for everyone. With an almost 6-inch display, it's a massive handset. And it runs Google's Android operating system, so fans of the iPhone are out of luck.

The Nexus 6. Source: Google.

Project Fi customers also can't take advantage of some of the perks the other carriers provide. T-Mobile, for example, offers unlimited music streaming that doesn't count against the data cap. Sprint allows customers to lease certain phones for no money down. And longtime Verizon or AT&T customers may still have unlimited data plans that aren't available to new subscribers.

Google's unique offerings
But Project Fi has a few unique offerings of its own.

It uses an exclusive network -- a fusion of both T-Mobile's and Sprint's. The Nexus 6 includes hardware that allows it switch between T-Mobile and Sprint's 4G connections on the fly, ensuring that Project Fi users always have the best signal. On a nationwide basis, Project Fi's coverage isn't as great as AT&T's or Verizon's, but it's certainly better than T-Mobile's or Sprint's.

Project Fi ties a user's smartphone number to the cloud. Using the Google Hangouts app, users can make and receive calls and text messages on virtually any PC, tablet, or other phone.

Should you opt for Project Fi?
Project Fi may be a good idea if:

  • You already have, or wouldn't mind getting a Nexus 6.
  • You don't use that much monthly data.
  • Your monthly data usage varies, but rarely goes over 5GB.

But it's probably not a great idea for those who:

  • Prefer to use the iPhone or a smaller or cheaper Android handset.
  • Consistently use more than 5GB of data per month.
  • Live in an area where neither Sprint nor T-Mobile offers good service.
  • Have a family plan with several handsets on one account.