Google’s Cell Service Could Snare All the Major Carriers
Google started work on Project Fi, its experimental cell phone service, about two and a half years ago. And according to Laura Holmes, who has worked on the project for most of that time, there were many inside the company who believed it would never work.
“Everyone internally and externally thought we were crazy,” says Holmes, a Google Fi product manager, referring to people both inside Google and out. “There wasn’t really any precedent.”
For some, the idea of Google offering its own wireless service still seems like a stretch, not only technically but—in the high-stakes world of smartphone wireless services—politically. Unveiled this past April and due to arrive on a broader range of devices this fall, Project Fi allows phones to automatically switch among multiple cellular networks and local area Wi-Fi networks, depending on which network offers the strongest signal at any given moment. Holmes paints this as a significant technical feat, but it also pushes against the business models that have dominated the wireless industry for decades.
Operated by Google and available to a limited number of users on Google’s flagship Nexus phones in the US, Project Fi lets you automatically move back and forth between two US cellular services: T-Mobile and Sprint. But this switching is hidden from you, the phone owner. You pay Google for service, while Google handles the technical and financial relationships with T-Mobile and Sprint. The carriers fade into the background, and you get a better signal from a reasonably inexpensive service that you can cancel at any time.
For you, the consumer, all this sounds great. Who doesn’t want a better signal and lower prices? But Google’s service won’t please everyone. Project Fi removes so much of the power traditionally held by the big wireless carriers. You’re no longer locked into particular carrier, forced to play by its rules and pay the fees it believes you should pay.
Today, Google’s invitation-only service is only available to a few people. And some wonder whether T-Mobile and Sprint, let alone others carriers like AT&T and Verizon, will agree to do this on a larger scale. But the cellular business is changing rapidly, moving closer and closer to the free-flowing wireless world Google envisions. T-Mobile embraced this trend years ago, doing away with long-term contracts and allowing for calls over Wi-Fi networks. Sprint followed, and even the biggest names, AT&T and Verizon, have moved in this general direction.
“The trend is inevitable,” says Richard Doherty, director of technology consulting firm Envisioneering, who closely follows wireless technologies. “The folks at AT&T and Verizon come from a monopoly background. They’ve been used to this since even before Google was born. But that’s not going to work anymore.”
The Mega SIM
When Project Fi started under a former Google ads leader named Nick Fox, many carriers and phone makers “weren’t quite ready to deal with the idea,” according to Laura Holmes. So Google worked in tandem with a German company called G&D, or Giesecke & Devrient, to create a new type of SIM card, that little sliver of electronics that slips into the back of your phone and connects you to a cellular network.
Traditionally, SIMs were provided by carriers like T-Mobile or Sprint, and they only connected you to one particular network. But Google’s SIM can move across network profiles, handling both T-Mobile and Sprint. And because T-Mobile and Sprint use different network technologies—GSM and CDMA—Google has equipped its Nexus phones with wireless radios that can work with both standards.
Apple now uses a similar SIM in its iPad tablet computers, letting you use networks from AT&T, Sprint, and T-Mobile. “I applaud Google’s service,” Doherty says, “but let’s give a tip of the hat to Apple.” The difference is that, after testing the various networks on the Apple iPad, you must choose one and only one—at least for a certain amount of time. And the iPad only handles wireless data, not phone calls and texts. Google lets you move between carriers on the fly, and it handles calls and texts as well as data.
That’s a much harder problem, as early reviews of Project Fi may indicate. Though Holmes declines to provide the specifics of how the technology works, she does say that Google uses a variety of information to determine when to switch between networks. “We use things related to your current network connectivity as well as things we know about the network,” she says. “And we look at the state of the device at the time.”
According to Holmes, the service can move you from cellular network to Wi-Fi while you’re making a phone call—and still keep the phone call going. It can’t do the same when switching from cellular network to cellular network (it won’t try the switch while you’re on a call).
Carriers Under Pressure
Project Fi doesn’t play with AT&T. Or Verizon. Or any other carrier overseas. But it could. Holmes says that the SIM is designed to handle up to 10 carriers. There’s no (technical) reason the service couldn’t provide a way of seamlessly moving among that many networks. “Right now, we’re just in the early stages,” Holmes says. “The first companies we’re working with on the carrier side are T-Mobile and Sprint, and the sky’s the limit.”
Could the service expand that far? Maybe not in the short term. But in the longer term, the idea isn’t that much of a stretch. Market forces are pushing the carriers that way, as they have for years. This is partly because Apple and Google have gained so much power in building the best phones. Both companies now have the leverage to change the way wireless services work. The carrier that doesn’t get on board risks being left behind.
Smaller carriers like T-Mobile have discarded the old way of doing things in an effort to grab more market share, and this has put added pressure on the other carriers. “The carriers realize the old model doesn’t work,” says Doherty. “There are alternatives to what they offer.”
At the moment, Google is only offering Project Fi on its own Nexus phones, which have a relatively small audience. But Holmes and company see the service as a way of pushing the broader industry forward, much as it has worked to push landline Internet services forward with the super-high-speed Google Fiber. This starts, Holmes says, with Google working hand-in-hand with T-Mobile and Sprint. “We’re working with our current partners to think about where we want to take the wireless industry over the next several years,” she says. But the project can also serve as an example for other carriers and handset makers.
Google, Holmes says, has already had “very light” discussions with other carriers about joining the project. And if you think they won’t play, consider that Apple is approaching much the same setup with its multi-carrier SIM. If you can swap between T-Mobile and Sprint on all the marquee phones, AT&T and Verizon will want in.
What’s more, both Apple and Google are also offering to finance phones—that is, spread your payments across many months—a service that typically happens through a carrier. This too separates you from the carriers. And in the case of Project Fi, it means you have no relationship with a carrier at all. Your only relationship is with Google. That may sounds strange. But it’s real. And it’s where we’re headed.