May 2015

A month and a half ago, I wrote a series of posts around Google’s announcement that they would become an MVNO and offer wireless service. The final post in that series was titled “What Might Google Really Do?” and it included my predictions on Google’s potential plays, based on what Google had actually said, and what they had historically done. Now that Google has officially “launched” Project Fi, it seems like a good time to check in on those predictions.

It’s important to note that, at this point, Google is launching Fi with an “Early Access Program” that is by invitation only. Some aspects of how the service will be delivered in the future will likely be quite different from how it is delivered today (undoubtedly based on lessons learned during the EAP) and some details aren’t yet announced.

But here’s what we do know. Google announced Fi via their official blog on April 22. They said “today we’re introducing Project Fi, a program to explore this opportunity by introducing new ideas through a fast and easy wireless experience. Similar to our Nexus hardware program, Project Fi enables us to work in close partnership with leading carriers, hardware makers, and all of you to push the boundaries of what’s possible. By designing across hardware, software and connectivity, we can more fully explore new ways for people to connect and communicate. Two of the top mobile networks in the U.S.—Sprint and T-Mobile—are partnering with us to launch Project Fi and now you can be part of the project too.” They then outlined three specific areas of focus and innovation.

High-quality network connections: “We developed new technology that gives you better coverage by intelligently connecting you to the fastest available network at your location whether it’s Wi-Fi or one of our two partner LTE networks.”

Communications across networks and devices: In addition to working across WiFi and LTE, Google says “With Project Fi, your phone number lives in the cloud, so you can talk and text with your number on just about any phone, tablet or laptop.”

A simple service experience: “We offer one simple plan at one price with 24/7 support. Here’s how it works: for $20 a month you get all the basics (talk, text, Wi-Fi tethering, and international coverage in 120+ countries), and then it’s a flat $10 per GB for cellular data while in the U.S. and abroad. … Since it’s hard to predict your data usage, you’ll get credit for the full value of your unused data.”

Here are the predictions I made, and a comparison with what we now know about Fi:

1. “Google would effectively be proving out new/unconventional approaches to connectivity offers (e.g. unlimited) in a way that proves out to the operators that there’s market demand (enough to be a threat) and that the economics can work (so that it’s attractive)” – This clearly seems to be the case. Instead of unlimited, the real innovation around the plan is refunding customers for unused data. T-Mobile’s CEO has welcomed Google’s “fresh thinking” implying openness to learn from Google’s experiment.
2. “I also would expect the scale to be limited, meaning it would have relatively limited retail impact on the operators” – this clearly is the case with the EAP and Google seems to continue to signal limited scale and the operators don’t seem threatened.
3. “I also wouldn’t be surprised to see Google want to move it around, so maybe each new Nexus device launched is a new MVNO on a different operator or set of operators” – Time will tell.
4. “I doubt they’ll try Google’s original Nexus web-based distribution” – For the Early Access Program (EAP) Google is using web-based distribution.
5. “They might try using their physical “stores” in Google Fiber cities” – Not yet anyway.
6. “They might also strike a distribution deal with big box retailers, like Best Buy or WalMart” – Again, not yet.
7. “I wonder if Google isn’t actually negotiating with the mobile operators to sell the service in their own stores or through their distribution channels” – Again, not yet.
8. “I doubt that Google has a desire to employ tens of thousands of customer service reps in both owned and outsourced call centers around the world” – Google has said that customers can call 24×7 and speak to a live US-based agent, but hasn’t indicated how they are providing this support.
9. “They may be able to leverage the care resources they’ve put in place to support Fiber” – We don’t yet know.
10. “Perhaps, they are going to leverage the mobile operator’s existing customer care infrastructure” – We don’t yet know.
11. “They will likely pair the service with a new Nexus device” – The service is only available with the Nexus 6 which has specific hardware and software to support the network switching unique to the service.
12. “Google’s issue will be ensuring that only the right customers for their experiment are the ones that choose their brand for wireless” – The invitation-only EAP will help Google target the right customers.
13. “Providing openness and choice, managing the network in an open, non-discriminatory, transparent way and giving users a choice of multiple service providers, may be an objective” – This hasn’t been emphasized in Google’s announcements.
14. “I can’t imagine that Google would see enough potential upside from [a full competitive entry going head-to-head against Verizon, AT&T, Sprint, and T-Mobile] to offset the serious downside it would have on their core business.” – There’s no indication that Google is pursuing an aggressive attack against the existing operators.
15. Maybe “it’s really all about IoT” – so far, it seems to be a smartphone plan, without any IoT elements.

So, out of 15 predictions (most of which were “mights”), I would say that five were aligned with what Google has announced (1,2,11,12,14), three predictions were wrong (4,13,15), and for the other seven, we just don’t know yet. We’ll have to keep watching.