This plan actually makes no sense. Overage charges are the same rate ($10 / GB), so why am I buying a "plan" at all? Why don't they just charge $10 * x gigs / month instead of all this buying / refunding business?
- refunds are perceived as gains (against the reference point of the monthly charge), whereas a fee is perceived as a loss (and losses hurt more) - bills are capped so the the possibility of big fees (losses) is eliminated (people struggle with probabilities and fear extremely unlikely events)
http://en.wikipedia.org/wiki/Behavioral_economics#Prospect_t...
Q: What happens if I go over my data budget?
A: Project Fi will first alert you if you're getting close to your data budget. If you go over, you'll still get full-speed data and data is charged at the same $10 per GB rate. For example, if you go over your data budget by 350MB, $3.50 will be added to your next bill."
> Project Fi will first alert you if you're getting close to
> your data budget. If you go over, you'll still get full-speed
> data and data is charged at the same $10 per GB rate. For
> example, if you go over your data budget by 350MB, $3.50 will
> be added to your next bill.
Perhaps having a big allowance in mind just encourages people to use their data!
As in, it's more expensive to meter everyone's data and charge per 100 MB, and cheaper to charge in 10 GB blocks and then refund retroactively. They are piggybacking off of other networks, which may not accept 100 MB purchases.
I can see them doing a purchasing scheme with the suppliers and then transferring the savings to the customer.
You get incremental costs per CC charge. Better, in Googles mind, to overcharge and refund rather than a new charge every 100mb.
To you or I it is easy to see the true nature of their "plans" but to someone who isn't quite sure how many megabytes are in a gigabyte, this probably makes it a lot easier to compare to, say, AT&T.
The service apparently alerts you when you get close the "limit". Which means that if you're disciplined you can cut yourself off or just realize that you need to increase your monthly budget.
For the business: Google carries zero risk of post-pay billing as you are paid upfront + they are earning interest on the aggregated cash they will either refund or pay to the telco(s) at the end of a month.
For the consumer: You are effective pay as you go, so you don't pay for unused data plus you have an upper limit on spend. The interest loss for money in holding is minimal at the individual level. And given this is likely recurring billing (so I doubt for most people they will ever get actually paid back) you simply keep a float in your google account and top up the difference each month.
It's like they're taking the best things of both carriers - their unlimited data plans - and pretending those things don't exist, that they're some figment of consumers' imaginations, and instead just taking the AT&T/Verizon approach, but using a soft and squishy dildo instead of a spiked rusty iron dildo to screw us with.
I wish Google and Apple would copy the concept and just have their phones always be on the network, with cell plans just serving as a way to get voice service and get a decent download speed. Now that Google has built out an MVNO, they could definitely enable such a thing.
No, T-Mobile and Sprint embrace it. It's what differentiates them from their competitors. They know that the claims of "oh no, unlimited data would cause congestion issues!!!!11one" were a poor excuse even a decade ago, let alone in the present day, and are thus unafraid to offer customers something that doesn't result in total shafting. AT&T and Verizon can have their fancy networks; they're moot compared to the millions of customers that pick Sprint and T-Mobile specifically because of the unlimited data plans.
Hell, T-Mobile's business model pretty much revolves around it at this point. "We'll give you a couple gigs of high-speed data; if you go over that, we'll just throttle you to 2G speeds without charging overages or any such nonsense. If you want more high-speed, pay for more of it or go with our actual unlimited plan. Oh, and we'll let you rollover your unused high-speed data and we won't make music streaming count toward it and we'll pay your current carrier's ETFs if you switch because we know that that's the only reason why you haven't already switched to us and you won't be locked into a contract anymore." They advertise all this every chance they get, and they deliver on those promises.
I switched to T-Mobile a year ago (from Sprint, which I switched to from AT&T) because of the zero overages, meaning that I wouldn't have to have an unlimited plan just for the peace of mind of not being shafted on a particular month because I watched one too many videos on YouTube or somesuch. A year later and I haven't looked back; definitely one of the better decisions I've made. Google Fi doesn't offer anything that would even remotely compel me to swtich (not even the dual-carrier stuff; I've found T-Mobile to be consistently better coverage-wise and speed-wise than Sprint in my area, so I'd probably just be on T-Mobile's network all the time anyway).
... which slows you to 2G speeds after 5GB, instead.
I want to like T-mo, I've been a customer in the past until coverage made me give them up, but that point above is somewhat an important omission.
You do realize they really do offer an unthrottled unlimited plan, right? $100/mo. for 2 lines (so $50/mo./line) as of five minutes ago when I double-checked their site.
Because they're acting as an MVNO, and have to pay Sprint and T-Mobile for each MB they deliver to the handset. Google is not trying to replace carriers, they're trying to improve the experience as an MVNO (they providing what Republic Wireless does on a much larger scale).
Google Fi also rides on Sprint (and T-Mobile, though it doesn't seem like T-Mobile is nearly as desperate for revenue at this point). So there's not really a difference there.
> Also, Republic retains the right to boot you if you use too much "unlimited" data on Sprint's network.
Pretty much all carriers have that bit of legalese in their respective agreements (even T-Mobile does, IIRC, and I know for sure Sprint does). Usually that's reserved for extreme cases where one's use of the network significantly dwarfs that of the rest of the user base and is actually causing congestion issues; a few extra gigs is a drop in the pond in comparison.
With pay per gigabyte, incentives are aligned. Consumers and websites have an incentive to conserve data. Carriers have an incentive to encourage use and increase speeds. There's no reason to block servers or VPNs or tethering. There's no reason to throttle BitTorrent or Netflix or terminate anyone's service for "excessive" usage. In fact, with pay-per-GB carriers should encourage BitTorrent use and fight for consumers against the MPAA!
Historically unlimited data has been better for consumers because carriers have charged ridiculous prices for overages (e.g. per-KB prices that add up to hundreds of dollars per GB), and consumers don't have a good way of knowing how much bandwidth they're using when they use different services, so they can't predict their bills. If these two problems can be fixed, pay-per-GB is the best way forward. I'm glad Google realizes this.
Or it's an obnoxious euphemism.
I have an unlimited data plan on T-mobile for 30 bucks. Paying by the megabyte would discourage me from using data, not "incentivize me to use less data".
>There's no reason to block servers or VPNs or tethering. There's no reason to throttle BitTorrent or Netflix or terminate anyone's service for "excessive" usage. In fact, with pay-per-GB carriers should encourage BitTorrent use!
Thank god for net neutrality, and unlimited/unmetered data, right?
Carriers acting like data is scarce and in need of conserving are discouraging users from using their product...
Who says that my usage of data is a "problem" needing "solved"? 10GB (the highest Google offers on its Fi page) can be burned through pretty quickly just by watching videos on a road trip or somesuch. I'd much rather pay $80 for an unlimited plan from Sprint or T-Mobile than pay $120 (or more) for Google Fi.
"Clogging the network" would be solved by carriers actually bothering to invest in their networks to handle the load. That would solve a multitude of other problems, too.
This is exactly my point. With unlimited data plans, carriers have little incentive to upgrade their networks. It increases costs without directly increasing revenue. With pay-per-GB, the incentive is clear: upgrading the network increases usage which directly increases revenue.
Attracting more customers because you offer unlimited data and other carriers don't sounds like a pretty-damn-direct increase of revenue to me.
See also: how T-Mobile makes money off me and millions of others.
Barring that, however (as I mentioned elsewhere in this topic), congestion issues are already resolved in the wired broadband realm by selling speed rather than data quantity. There's little reason why the wireless world can't do the same by selling access to 2G/3G/4G separately, then making every plan unlimited (or, at the very least, have way bigger caps for everyone, as is the case currently with some of the not-so-great broadband ISPs).
Basically, you'd have T-Mobile's approach, but with a lot more flexibility. In combination with a no-contract carrier (like T-Mobile) or reseller (like Google Fi), a customer could, say, subscribe to a 2G or 3G plan for normal usage, but then subscribe to the 4G plan for a day or so if he/she wants to binge-watch Game of Thrones or somesuch. This way, the congestion issues are addressed (there's a direct monetary incentive for carriers to build more robust networks, since the faster data subscriptions would cost more and generate more revenue) while not imposing arbitrary caps on the quantity of data "used" by a customer. Win-win.
This could be even further extended by providing the 2G and 3G plans with an optional scheme of "we'll give you $X days of 4G per month" (similar to T-Mobile's "we'll give you $X gigabytes of 4G per month"). That way, our Game of Thrones bingewatcher doesn't have to deal with changing the subscription; he'd instead have a week's worth of 4G per month that he could activate on a per-day basis (for example). An even sweeter deal would be for these unused days of 4G to roll over to the next month up to a year (or some other suitably-reasonable length of time), like what T-Mobile already does for its non-unlimited plans.
There's more than one way to do it :)
Time is the more important measure of cellular network usage than bytes. I think it would be more convenient for customers to be billed per minute. At $10/GB if my average speed is 5 Mbps that's $0.30 a minute. Or $30 to watch a full-length movie in HD. Makes me wish Netflix still had mail delivery.
No, upgrading the network allows you to serve more customers at higher cost (the cost of the upgrades). If you have unlimited data plans, you can only recoup those upgrade costs by recruiting more customers because existing customers pay the same regardless of the speed. Recruiting more customers is also costly and affected by many more factors than just network quality. The connection between network upgrades and increased revenue is tenuous and indirect.
In contrast, with pay-per-GB, network upgrades increase usage and thus increase revenue from existing customers as well as new ones. The connection between network upgrades and increased revenue is direct and immediate.
I agree that $10/GB is far too expensive; I'm sure Google would love for it to be cheaper but the pricing isn't their choice to make. When carriers get some competition from Project Loon and/or Elon Musk's satellite thingy, hopefully prices will go down.
Upgrades are a one-time cost. You charge a higher rate for access to the faster network until the investment is paid off then you phase down to all customers. Then your operating cost is lower per subscriber in the long run.
In contrast, with pay-per-GB, upgrades increase revenue automatically without losing customers. You don't have to increase your rates and you can probably even decrease them and still increase revenue.
edit: Removed reference to cash conversion cycle because it doesn't really have anything to do with that.
My best guess with 2mins of [re]search: Let's suppose they hold on average $10 per month per customer that's unused, Nexus 5 sold between 3-5 million units, apparently. So for Nexus 6's on their Fi plan they're likely only looking at the invested benefit of $30M (USD)? Google probably have that sort of cash down the back of the sofa, would they even bother investing the float? Or are my guestimations just way off??
UK utilities I've always assumed are doing this hence the wilder and wilder over-estimation of bills in order to hold more customers cash. Wonder how much Google will push the "let us hold your cash, you'll get back what you don't spend" line in order to have more cash to play with. How evil are they prepared to get to hold some extra pocket change?