Google Fi’s new “unlimited” plan is an admission of defeat for the upstart MVNO


X Scalper

Google announced a new “unlimited” plan for its Fi cellular service this morning, and on paper, it’s an improvement in most ways over the company’s current pricing model for heavy duty users. Data caps have been increased to 22GB before throttling, while pricing for individuals has been lowered to $70 per month (previously, Fi maxed out at $80/mo for individual users). The catch is that it’s $70 per month, full stop — Fi’s dynamic data pricing doesn’t apply to unlimited subscribers. For those who want to stick with Fi’s old dynamic model, they’ll still be limited to 15GB per month before throttling may occur, and enjoy the same per-gigabyte pricing they always have. The new unlimited plan is something you’ll have to opt into… and it really just feels like every other carrier plan in America.

The reason for this is simple: wholesale data pricing in the US makes “real” unlimited data next to impossible for a virtual provider like Fi. If T-Mobile and Sprint are charging Google by either the amount of data that it uses or under a set subscriber line access fee (which they are), there’s little Google can do to escape the terms of these wholesale agreements. For example, it’s abundantly obvious that Fi’s new “unlimited” plan is being limited by the terms T-Mobile or Sprint are offering, those being a 22GB soft data cap and mandatory 480p mobile video streaming. The latter makes it especially apparent, as Fi has always operated under a ‘your data, your rules’ philosophy; that is, so long as you’re within your monthly allotment, you can use those gigabytes for any purpose without restriction. It’s pretty rich to see content-aware throttling being embraced by one of the open internet’s biggest advocates.

Fi’s fundamental promise — to be truly different from other wireless carriers — seems to be dissolving before our eyes. The tiered data plans still do stand out in the industry, but it’s clear Google has run into business limitations when it comes to scaling that model. After all, I doubt you’d find a Fi subscriber who wouldn’t prefer to just see the tiered plan’s data limits grow while remaining on the same pricing structure. I have to imagine that was Google’s plan initially: an expectation that wholesale data would become cheaper and cheaper, allowing Fi to keep its rates flat while increasing what those rates bought you as the years went on. It’s an appealing concept. And eventually, especially as 5G begins to roll out, that may yet happen. But today’s announcement of the unlimited plan is basically an admission of defeat, for the time being, on that initiative. It also makes one conclusion implicit: Google doesn’t believe substantially reduced prices on true wholesale per-byte-data are a likelihood in the near term. And it’s unclear what motive carriers would have to lower them. If they can negotiate per-line faux “unlimited” data with MVNOs and tack on restrictions about streaming video or anything else they fancy, why offer a way to sidestep that? Carriers want a way to upsell their customers, make their income more consistent, and retain a high level of QoS control over their networks. These not-unlimited plans are a good way to do just that.

So, what’s next for Fi? Google’s involvement in the CBRS initiative is probably tied up in some nebulous way to Fi’s future, but it seems like consumers won’t be able to reap the benefits of this new “open” spectrum agreement for at least a couple more years, as initial rollouts are primarily focused on private, commercial 4G networks. And 5G’s arrival in the US shouldn’t be held up as a beacon of hope just yet, either, as the rollout has been painfully slow to materialize. Sprint has promised to provide Google Fi access to its 5G network — currently the largest in the US (by far), covering over 11 million POPs. But this agreement offers no light at the end of the data cap tunnel, just access to a faster network.

Based on today’s announcement, my theory is that the next big thing for Google Fi is whatever next big thing will be for the carriers it purchases service from. And that means we probably have a while to wait. It’s incredibly hard to be a real maverick in the mobile operator business when you don’t actually own or operate your own network, and Google seems to have run up against the limitations this model inherently comes with. Free international roaming and flexible billing are certainly nice, but they aren’t transformative or disruptive in a way that’s likely to give Fi mass market appeal. It remains a good option for those with specific use cases (low data consumption, lots of international travel), but today’s big reveal of Fi’s new data plan was far more revelatory of a basic truth: At the end of the day, Google Fi is still just another MVNO.




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