Google (NASDAQ:GOOGL) shared new details about its wireless service Wednesday, a mobile carrier service called Project Fi that would compete with AT&T (NYSE:T) and Verizon (NYSE:VZ). The pay-as-you-go service will start for as little as $20 per month.
The service will use spectrum from T-Mobile and Sprint (NYSE:S) to create an affordable plan for consumers. It is less expensive than other pay-as-you-go plans, because Google’s service will automatically toggle between cellular data and wi-fi, meaning that consumers would only pay for cellular data usage as a backup when wi-fi is not accessible.
“If you leave an area of Wi-Fi coverage, your call will seamlessly transition from Wi-Fi to cell networks so your conversation doesn’t skip a beat,” Google said in a statement.
In addition to the $20 per month, the plan will charge $10 per month extra for each gigabyte of cellular data used in both the U.S. and abroad.
Analysts view this move as part of Google’s larger effort to get the world online. The company has developed Internet balloons and drones to help developing regions get Internet access, something that would greatly help their business.
James Cakmak, analyst at Monness Crespi Hardt, says that he does not think wireless carrier service is a long-term initiative for Google and that “this is largely a push to put pressure on carriers to bring pricing lower and make data speeds faster.”
He said that it would not make sense for Google to pursue this line of business forever because “the only way to be in it for the long run is if you’re going to have your network and building out your own network is extremely expensive” and “takes decades and billions of dollars."
Google shares are currently trading around $540 and the company has a market cap of $368 billion.