Have you ever had a conversation with someone and they justified their disconnect with society by wishing that they lived in another era? Quite a few times in having conversations with people I have heard many a friend or colleague say “I was born in the wrong period”. Whether it is pining for the “good old day” of the 1970s or in some cases wishing they had been born into this current generation, it is fun to wonder what life would have been like in a different time. This same what if happens in technology as well, what if a product had been released at the right time? What if an innovative product had been released today? This discussion happens a lot when the Palm Pre and WebOS get brought into a conversation for instance.
This got me to think about Google Fi, the search giants wireless service. Launched in 2015, the phone service was meant as a sort of alternative to the big wireless carriers like AT&T and Verizon. The idea was simple, only pay for what you use with a dynamic ability to switch between WiFi and mobile networks seamlessly and support in most countries. In a time of data overages and hidden charges on bills, the idea was superb and a breath of fresh air. Fast forward to 2020 though, and everything has gone unlimited since we use our phones more than we ever had. It makes me wonder if it was marketed more heavily on launch could this have been the proper phone solution for everyone? Or even today, is it possible that Google Fi has the right idea that we are too blind to see?
A Light in the Dark Ages of Wireless
When Google Fi, then named Project Fi, was first announced the cell phone carriers here in the US were in a position of leverage. Smartphones were all the rage and many people were upgrading their flip phones into iPhones at a rapid pace. In the era of two-year contracts, customers were adding mobile data to their plans to be able to fully utilize the capability of these new advanced devices. There was no precedent of this prior, and many customers had no idea what to expect in terms of pricing.
This allowed carriers to run rampant with hidden fees and overages. Initially, there were unlimited data plans but eventually, those were replaced by tiered data plans since a large majority of wireless users were not using enough data to warrant having an unlimited plan. It was in this environment of capped overage riddled data and 2-year contracts that T-Mobile began to make noise in the industry with their Un-Carrier movements to institute more straightforward pricing models and bring back unlimited data.
It was in this great time of change that Project Fi found itself being introduced. Much like T-Mobile, Fi was a much more straightforward approach to wireless billing than what was being implemented by AT&T, Verizon, and Sprint. Those carriers tacked on little fees such as regulatory charges, administrative charges, and gross receipt surcharges. This complication was not present on Google Fi. There are only two charges on a Fi bill: calling and texting for $20 and then the data plan selected. Eventually, more companies came on board to this model and it has become industry standard to have more straightforward pricing.
The real benefit of Fi though was the honesty that data was priced and refunded. Since Google uses a per-gigabyte model for pricing data, the company will refund any unused data. Say for instance that you pay for 3 GB of data a month from Fi, which equals $50 per month ($20 for calling and texting, $10 per GB of data), but one month you only use 1.5 GB of data. Instead of your bill remaining $50, Google will refund the data you did not use (in this case $15) back into your account. This was the genius of the Fi pricing model that we quickly forget about as everything has shifted to unlimited everything.
The Unlimited Model
As phones have become more advanced they have replaced laptops for many people. To accommodate this, carriers have brought back unlimited plans as the standard sort of plan in the United States. The way that most carriers implement their unlimited plans today is by using a cap and throttle system. To use T-Mobile as an example, the carrier has a high-speed data cap set at 50 GB and once that threshold is passed data speeds are slowed to 2G speeds.
While heavy users often lament the existence of any sort of data cap, the reality is that heavy users are the minority of smartphone users. The average smartphone user uses 2–5 GB of data per month. In the grand scheme of things, paying for an unlimited plan for most people does not make any sense other than the implied need to have an unlimited plan just in case. The most common critique of a service like Google Fi is that not enough data is offered and the value of an unlimited plan by comparison. But is it really valuable if it is never utilized?
Yet the reality of wireless in the United States in 2020 is that every carrier must have an unlimited plan. Google is not immune to market trends and late in 2019 unveiled an unlimited plan. Relatively speaking, Google’s unlimited plan falls in line with what most of the industry is charging for a single line and group unlimited plan. The pricing is not the issue here, but rather the move to unlimited takes away from some of the practical allure of Google Fi. The premise of Google Fi was incredibly fascinating and the potential to shift the way we look at carriers, but it appears that this potential may never be realized.
The Advantages of Google Fi
The honest billing practices of Google Fi are just the tip of the iceberg when thinking of the advantages of the carrier over the more household names that come mind when thinking of wireless carriers. Another advantage of using Fi is if you travel internationally or are in contact with people abroad. Fi has built-in roaming coverage for over 200 countries and free calls to over 50 countries from the US. In comparison to other US carriers, this is incredibly competitive.
A few years ago, I was traveling to visit my father in Jordan. My carrier, T-Mobile, offered some international add-ons but Jordan was not one of those countries at the time (it is now). When I inquired about the rates I was astonished at how high the rates were. $15 per megabyte of data, $0.50 per text message, and $0.25 per minute of a phone call. Compare that to Fi, Jordan is fully covered with the base plan without the need to have any sort of add-on service. This level of transparency is the exact opposite of what has come to be expected from wireless carriers.
This level of transparency that Google the carrier offers its customers. Years ago when I managed a Cricket Wireless location, I could not stand the process of switching a phone number from one carrier to another. The process, called porting, requires the account number and PIN from the old carrier. Most people do not know their account number off hand. For a postpaid carrier like Verizon or T-Mobile, this can easily be found on a billing statement or online account. But a prepaid carrier like Boost Mobile requires a call into customer service, where it is the job of the representative to try and keep you as a subscriber. This process is called retention. Google Fi does not do this when there is a request to port out a number from Fi, the account number is generated immediately by Google. This is yet another example of the carrier doing something different that is very pro-consumer.
The last advantage comes when using a phone that is specifically designed for Fi, such as a Pixel or Moto G device. This feature is called handoff. Google Fi is an MVNO (mobile virtual network operator) that operates off of a combination of T-Mobile, Sprint, and US Cellular based on which carrier has the strongest signal in the area. This usually defaults to T-Mobile but the option of three is a nice feature. In addition to this, there is a smart handoff between cellular data and WiFi hotspots, which helps save on data as well. Xfinity has implemented a similar type of setup for Xfinity Mobile while using Xfinity hotspots across the country. Another move that is pro-consumer allowing for a great experience without the gimmicks and tricks of the traditional carrier experience.
Think about the process of purchasing a phone or any other sort of interaction at a cell phone store. What starts as an innocent trip to maybe upgrade to a new iPhone, quickly turns into a sales pitch dance between customer and associate. There is a checklist that cell phone salespeople go through, trust me I used to be one. The phone is the least important thing for a salesperson. Where the focus is placed and where the commission check is made is through what we call add-ons. Accessories, additional plan features like insurance, and anything that will create a new line like a tablet.
There is a great game between what the customer wants and what they will leave the store with. This reality leads to a lot of people shying away from going into stores because they do not want to feel like they have been taken advantage of. This is the beauty of a transparent and online setup like Google Fi. A customer purchases what they need and nothing more. From the perspective of a consumer, this sort of model makes more sense and I am frankly surprised that it is not more popular.
Game of Inches
In the US, the modern cell phone carrier goes after a customer’s cash in small chunks. When rationalizing the reason to buy a new phone via monthly payments are used as opposed to a full cost price. Everything is spoken in terms of “just an extra x dollars per month”. By positioning monthly payments over 24 months sans interest, the likelihood of closing the sale increasing since lower figures are being used.
While a service like Google Fi may offer an overall better value than a traditional carrier, it is not looked at that way because of the way that we are sold phones and the vague promises of cellular reliability from known brand names. Years ago, when I was taking a marketing class my professor talked about human nature as it relates to buying habits. He said that humans are creatures of habit, it is why we go for the same parking spot when we go to work. This reflects in the way that we spend our money, we budget with a set cost in mind regardless of missed savings.
This is the dilemma of the original Google Fi plan. A fluctuating bill that is fair based on usage with built-in bill protection from overages creates uncertainty for budgeting purposes. Although this will do nothing but save money monthly, the lack of a consistent number makes many people feel uncomfortable.
Google Fi, despite all of this, has enough positive going for it to be worthy of consideration for most people. Dynamic billing, fast network switching, and excellent international data with no long term commitment. People are holding onto their phones for much longer than they used to as the price of phones continues to rise on a year after year basis. This has led to more people looking into discounted devices and lower-priced ones as well. This new buying habit from consumers makes the 2-year financing standard come into question.
Consider the iPhone SE. At $400, it is much more reasonable for many people to buy the phone outright and use it for more than 3 years as Apple has an excellent track record of software support. Pursuing a prepaid option for cell phone service makes sense now more than it ever has. We are experiencing a change in almost all facets of the traditional smartphone experience. So the next time you look at your Verizon or T-Mobile bill and realize that you aren’t in the 1% of people that use 20GB of data, maybe it is time to consider another carrier. Perhaps that carrier should be Google Fi.