Is Google's Fi the Cheapest Phone Service?

By Markets Fool.com

Google has made a peculiar, stumbling move into the wireless phone industry.

Continue Reading Below

The company's new Fi service offers low-cost wireless plans that send most of their traffic over Wi-Fi networks. Withthat type of connection, the service makes a connection with theSprint orT-Mobile network -- whichever happens to be stronger in a given location. Other companies including FreedomPop and Republic Wireless use the same model, with both of those carriers having deals with Sprint for when Wi-Fi isn't available.

In the case of Google (and any other companies using this model of Wi-Fi plus leased network access) it's about delivering cheap service. The search giant has delivered that, but how do its plans compare to those from FreedomPop and Republic Wireless? And is Fi a better deal than the best plans offered by Sprint and T-Mobile, which are the cheaper of the four traditional carriers?

How Google stacks up
Google launched Fi with a fairly typical pricing plan for a low-cost carrier, with a couple wrinkles. Unlimitedtalk, text, Wi-Fi tethering, and international coverage in 120-plus countries costs $20 a month plus $10 for each GB of data. Customers sign up for a set amount of data, but -- and this is the first wrinkle -- get a refund for whatever they don't use. That's a positive variation on T-Mobile's plans that allow unused data to roll over.

"Since it's hard to predict your data usage, you'll get credit for the full value of your unused data," Google wrote in its blog. "Let's say you go with 3GB for $30 and only use 1.4GB one month. You'll get $16 back, so you only pay for what you use."

The second wrinkle, and this one is a head-scratcher, is that Fi only works with the Google Nexus 6 phone, which costs $649 without carrier subsidies. That seems like a steep price to pay for a phone that goes with a discount phone service.

Continue Reading Below

Plan Text & Calling Data Total:
Google Fi 1 GB $20/Month $10 $30
Google Fi 3 GB $20/Month $30 $50

FreedomPop and Republic Wireless
Both lesser-known carriers offer very similar pricing to Google, though with less straightforward plans.

FreedomPop's plans actually start at free, which gives users 200 voice minutes, 500 text messages, and 500 MB of data. Its second-tier plan costs $6.67 a month (though to get that price you must pay for a full year up front) and comes with unlimited voice and texts, along with 500 MB of data. Additional data costs $0.025 per MB.

The alternative carrier also offers an unlimited everything plan at $15 a month with a free monthlong trial. That offer isn't exactly unlimited, as it features1 GB of data at 4G speeds (where available), which is reduced to 3G speeds after that. FreedomPop allows customers to bring their own phones, though only some models are supported, and it sells older, refurbished models at a decent price.

FreedomPop is a bit like flyingSpirit Airlines,where the base price of admission gets you a ticket and literally nothing else. Signing up for a plan with the carrier means navigating a minefield of potential additional fees.

Plan Includes: Cost:
FreedomPop Basic 200 minutes, 500 texts, 500 MB data $0
FP Unlimited Talk & Text Unlimited text, calls and 500 MB data $6.67
FP Unlimited Everything Unlimited text, calls, and 1 GB of 4G data then unlimited 3G $15

Republic Wireless follows a similar phone sales model, offering a handful of older smartphone models at fair prices. Its plans, however, start at $5 a month for Wi-Fi-only service, moving to $10 for unlimited text and calling using the Sprint network with data over Wi-Fi only. Paying $25 a month buys a user unlimited everything with data at 3G speeds while $40 brings unlimited everything with the first 5 GB at 4G speeds.

Plan Includes: Cost:
Republic Wireless
Wi-Fi Only
Unlimited talk, texts, data over Wi-Fi $5
RW Republic Plan Unlimited talk, texts, (including Sprint network), data over Wi-Fi only $10
RW Republic + 3G Unlimited talk, texts, and 3G data $25
RW Republic + 4G Unlimited talk, texts, and 5 GB at 4G, then unlimited 3G data $40

AreT-Mobileand Sprint options?
T-Mobile's cheapest plan offers unlimited calls and texts and1 GB of 4G data for $50. As is true of all its plans, the carrier offers free, slower data after the paid-for allotment has been used. T-Mobile also offers a wide selection of phones, with some even costing less than $50.

Sprint has an unlimited plan that costs an even $60 a month, which includes talk, texts, and what it calls "high-speed data" without specifically saying 4G. The carriers also offers a data plan with unlimited calling and texts, along with 1 GB a month, for $35. Extra data costs $0.015 per MB.

Sprint does not have quite as broad a selection of phones as T-Mobile but it does show options at a variety of price points.

Plan Inludes: Cost:
T-Mobile 1 GB Unlimited talk, texts, and 1 GB of
4G data, then unlimited slower data
$50
Sprint 1 GB Unlimited talk, texts, and 1 GB
of 4G data
$35
Sprint Unlimited Unlimited talk, text, and "high-speed data" $60

How it all stacks up
Google has built a service with decent pricing and a unique rebate plan, but tying it to the Nexus phone greatly limits its appeal. If you're looking for very low-cost options, every other carrier listed here has cheaper plans -- largely due to the $649 cost of Google's phone.

If you are willing to go with a lesser-known carrier, Republic Wireless and FreedomPop offer better deals than Fi. Sprint has similar pricing and cheaper phones, while T-Mobile charges a bit more but has a wide selection of smartphones for all budgets and offers unlimited data (albeit slower) with even its cheapest plan.

It's hard to identify Google Fi's target audience -- it's not the cheapest service offered, and when you factor in a $649 phone the cost goes up exponentially.

The article Is Google's Fi the Cheapest Phone Service? originally appeared on Fool.com.

Daniel Kline owns shares of Apple. He admits he watched the Bruce Jenner interview. The Motley Fool recommends Apple, Google (A shares), Google (C shares), and Spirit Airlines. The Motley Fool owns shares of Apple, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.