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Prepaid Wireless Tracker #125, Dec 2018 - Google Re-Brands MVNO As Google Fi
December 01, 2018
Prepaid Wireless Tracker
- December 2018, Issue #125
Nearly three years following its launch of Project Fi, Google has now changed the name to Google Fi, and users can now bring their own phone. Note that using one of Google's phones allows you to seamlessly connect to T-Mobile, Sprint, and U.S. Cellular depending on what gets you the best coverage. When you bring your own phone, you don't get this switching technology. It's interesting to note that with the pending Sprint, T-Mobile merger, this switching value proposition will essentially be moot. That said, Google's plans are simple and easy to understand. Though with competition being what it is, its plans aren't as compelling as they used to be.
Personally, I don't see why Google is still playing in this market. While its offering is respectable, I don't see how it's driving any real revenue. Perhaps they see value in the customer usage data, or other advertising play. It will be interesting to see how long they continue supporting this product before terminating it. I can't visualize it as a long term play for Google, but you never know!
For $50 for two lines of unlimited talk, text, and data, this is a pretty good deal. However, note that it's "basic" data only, which equates to 2G speeds. In a world of 4G, with 5G on the horizon, 2G is pretty bad; it really should at least be 3G. That's how the company ensures profitability I suppose. While they are offering 3GB of additional data for the first six months, I tend to look at long term value, and not short term promotions, but that incentive is there nonetheless. Also, although existing customers are eligible for this new plan, new customers are eligible to receive a free Samsung Galaxy J3 or Motorola Moto E4 smartphone; both of which are very respectable phones.
Combining two major carriers resulting in a lowering of competition and a subsequent increase in price seems obvious. That said, it's an important reality that needs to be considered. The carriers talk of prices decreasing, however, that's clearly smoke and mirrors in an attempt to gain approval. The long term impact will be higher prices in a country that already pays among the highest data rates in the world.
American carriers can learn from this creative tactic. Customers on its 10GB plan get 100GB of overage that they can dip into whenever their plan allowance is depleted. Depending on your usage, this could last a month or years. This peace of mind could drive people subscribe to the higher priced plan, and certainly differentiates them from other carriers with similarly priced plans. Ultimately, I like to see carriers trying to be creative, rather than simply competing on the lowest common denominator, price!
As the year wraps up, this is a fantastic overview of the entire wireless market. I always appreciate Mike Dano's articles, and the work he puts into them. While there has been some shift in market share between the major carriers, and some improvement in overall revenue, what's really telling is how flat the market has been. Saturation is a huge problem, and as postpaid has reinvented itself, and is becoming less differentiated from prepaid, competition is fierce, resulting in shrinking profits, and overall customer confusion. Hopefully we can see some more creativity from carriers in the coming year, otherwise we'll see a lot more charts showing declines!
Here's an example of the lack of creativity I was noting earlier as the major carriers slash pricing on their unlimited plans. When comparing plans, though, don't forget that they usually come with caveats like no HD video streaming, throttled speeds after a defined amount of data usage, and hotspot may or may not be included, or have it's own throttling restrictions. That said, these price wars are generally good for customers, though tend not to last indefinitely. I recall when Boost Mobile launched its original Unlimited by Boost plan for $50/month. You still had to pay taxes and fees on top of that, however, at the time it was absolutely revolutionary pricing, with the major postpaid carrier unlimited plans running well north of $100/month. Now this price point is pretty common, and you can find plans from a myriad of both large carriers and MVNOs sitting at less than that.
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