Editor's Corner—Whatever happened to Google’s big MVNO, Project Fi?

Google announced its Project Fi MVNO more than two years ago. In the intervening years, Google has added two additional major wireless partners (three in Europe and U.S. Cellular in the United States), a family plan and one major new phone, the Pixel.

Google’s Project Fi is still headed by the same executives—Nick Fox, VP of communications products at Google, and Project Fi product manager Simon Arscott—and it still offers the same $10-per-GB pricing options that it started with in April 2015.

Meanwhile, all the nation’s top wireless carriers have moved wholeheartedly into the world of unlimited wireless service. The situation raises the question: Is Google’s Project Fi still pertinent in an unlimited data world?

“The service is a little less relevant now, given the price wars in wireless and the unlimited plans, so there's less price (data use) sensitivity,” acknowledged Mark Lowenstein, managing director of Mobile Ecosystem and a FierceWireless contributor.

The concept of Project Fi is great—it was in 2015 and it still is today. The problem is that is quite a technical assessment based on the value of that more seamless service experience, and it is hard to play that card when everyone is offering unlimited data,” agreed Strategy Analytics analyst Philip Kendall.

When asked how Project Fi might compete against unlimited offerings from Verizon, T-Mobile and Sprint, a Google spokesperson responded: “Greater access to wireless data is good for users. Our focus has always been to drive innovation forward in wireless connectivity and share these innovations with partners in the ecosystem. Wi-Fi assistant is an example of a project that started in Project Fi and expanded to more devices.”

Google’s Project Fi launched with the promise of putting users on the best network available, be it T-Mobile, Sprint or one of roughly a million free Wi-Fi hotspots in Google’s database. Thus, Project Fi can be counted among a handful of so-called Wi-Fi-first providers, MVNOs that work to push customers’ traffic onto Wi-Fi in order to protect them from the cost of cellular data. But that space hasn’t developed as some had hoped: Scratch Wireless, an MVNO on Sprint's network that launched in 2013 with a Wi-Fi-first mobile service model, halted sales last year due to work on unspecified new products and services; today, the carrier appears to have resumed sales, at least on one aging device.

And Comcast said its own new MVNO, Xfinity Mobile, won’t support Wi-Fi calling and handoff services—technology Google offered more than two years ago with Project Fi.

“There is value in the Wi-Fi-first concept, but it is an increasingly tough sell. The unique selling position of ‘you’d be surprised how little cellular data you need’ is a really hard one when up against ‘you don’t have to worry about how much cellular data you use,’” Strategy Analytics’ Kendall said. “So Fi has the challenge of being a product that might appeal to more techie users but commercially is of more interest to price-sensitive lower-use customers. Collectively, those Wi-Fi-first propositions have approximately 3 million users in the US—challenged by that niche pricing position, often limited device support, and marketing spend dwarfed by the big 4.”

Of course, Google hasn’t been standing still in the communications market. Google’s Fox, VP of the company’s communications products, has been pushing other efforts at the company including its support for RCS technology and the company’s new Allo chat app for Android and iOS.

More widely, Google has been expanding into the streaming media and entertainment market with, among other offerings, its YouTube TV and Android TV products. Those are noteworthy considering both AT&T and Verizon are moving into the same areas with, respectively, DirecTV and Time Warner and AOL and Yahoo.

Already AT&T has been bundling its DirecTV Now service with its wireless plans—which raises the question of whether Google might employ the same sort of bundling strategy with, say, Fi and YouTube TV.

I'm less excited about how Project Fi can be integrated with YouTube TV, but think there's some interesting opportunities to effectively integrate with other hardware such as Google Home and Assistant,” said Mobile Ecosystem’s Lowenstein.

When questioned about such potential bundles, Google’s Fi spokesperson said the company has “no plans to share at this time.”

The fact remains, though, that Google’s Project Fi doesn’t appear to have received much attention from what is one of the world’s largest internet companies.

“Google is not putting much marketing push behind the service ... they never really have ... and there's not a large number of newer phones that are optimized to work on the service,” Lowenstein added.

Indeed, two of the three phones for Project Fi—the Nexus 6P and 5X—will no longer be supported by Google starting next year (Project Fi launched with the Nexus 6 but no longer sells that phone). And Google opted to sell the Pixel, the service’s third phone, through Verizon rather than keeping it exclusive to Fi, a strategy that would have surely raised the profile of its MVNO.

Google, like most MVNOs, doesn’t disclose subscriber numbers, so it’s difficult to say exactly how the service might be progressing. Both Sprint and T-Mobile have seen growth in their wholesale subscriber figures, but there’s no way to draw a line between that and Project Fi.

So, Google’s Project Fi may well be growing. But it certainly doesn’t appear to have captured much attention. Moreover, the service’s main point of differentiation—the ability to switch among multiple wireless networks—is definitely noteworthy but isn’t nearly as attractive as, say, the ability to watch unlimited Netflix on your phone.

Will Project Fi eventually join the long and growing list of other retired Google products like Google Reader, Google Talk, Google Wave, Google Buzz, Picasa or Project Ara? It might eventually. But there are at least some indications that Google continues to devote resources to Project Fi: Google’s Fox tweeted just this month that the company would add RCS support to Project Fi in the near future.

Finally, an MVNO that aggregates connections among T-Mobile, Sprint and U.S. Cellular in the United States will become far less noteworthy if T-Mobile and Sprint reach a merger agreement, a transaction that’s looking increasingly likely. — Mike | @mikeddano

Article updated June 12 to include information about the Nexus 6.