Google enters US wireless service market

Google made its entry into the mobile communications business on Wednesday with a limited test in the US of a service under which customers pay based on the amount of data they use.

Though small-scale at launch, the internet company's entry into mobile has attracted huge attention among established operators, thanks to the disruptive stance it has taken in other parts of the communications world as it tries to lower prices for consumers and increase usage of its services.

An experimental high-speed internet service announced in Kansas City four years ago has since been extended to a number of US cities, prompting other broadband companies to accelerate their own plans for high-speed services.

The Google mobile service, called Project Fi, is designed to lower mobile bills by letting consumers pay only for the amount of data they use each month, compensating them for unused portions of the data plans they buy.

It also taps into WiFi networks where available to lower the costs of delivering the service and reducing pressure on the networks of the two mobile companies whose service Google is reselling, T-Mobile and Sprint. Data traffic will be routed over whichever network offers the faster service at the time, Google said.

By creating a service out of WiFi and network capacity from the smaller of the US's four national mobile operators, the internet company could also demonstrate the potential for other new entrants to break into the mobile market against dominant operators AT&T and Verizon.

Google said the service would cost a flat rate of $20 a month to cover domestic voice calls and domestic and international texts, with an additional $10 for each gigabyte of data usage.

The pricing is comparable to plans from other companies that offer higher levels of data usage, such as a $70 flat fee plan from T-Mobile that comes with 5GB of data. However, Google customers will only pay for data they actually use, while other carriers either charge for the full plan or allow unused capacity to be carried forward to future periods.

Google has toyed for years with ideas for breaking into mobile communications directly or otherwise intervening in the industry to bring down the cost of high-speed wireless access and make sure networks remain open for its services. In 2008, it went as far as to offer nearly $5bn in a US wireless auction, eventually losing out to other operators but gaining an assurance that the spectrum would be open to any applications.

Apple has also tried to undercut the mobile operators' control of data pricing, introducing a programmable SIM card in its iPad Air 2 and iPad Mini last year to let users switch more easily between different carriers' networks.

The new Google service, called Project Fi, is initially by invitation only and only works with the company's Nexus 6 handset.

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