What Does Google Think the Carrier of the Future Looks Like? We Used It for 20 Days

Leave aside the handset restrictions, and this is the best carrier service you can get right now.

After 20 days on Google's SIM card, I found myself asking the same question every day: why can't China Mobile and China Unicom do this?

Getting a number or buying a phone from this carrier, called Project Fi, means working through a web page that never shows more than three options at once, filling in your details step by step and placing the order. You don't have to comb through a site as sprawling as JD.com to find the feature you want.

Open the Fi app and you get a chart, drawn for you, of how much data you used each day. You don't have to wait for a monthly bill with four or five hundred densely packed lines of "GPRS statement."

In American cities, a phone running Fi connects to public Wi-Fi on its own to save data. You don't have to open Wi-Fi settings, check whether a particular carrier's network is nearby, and then type in a username and password.

Fi's pricing comes down to two numbers:

• $20 a month covers all calls and texts; this part is mandatory;
• Data costs $10 per GB, and you pick how much.

At the end of the month, the data you didn't use is refunded to your bank account, pro rata. You don't have to keep track of the 500MB you have left or how long it stays valid.

If the number you use draws too many spam calls, you can ask customer service to change it. No new SIM card.

The strangest part may be what happens when you land in China. Fi doesn't advise you to switch off data to avoid steep roaming charges; it says "Welcome to China." Its rates:

• Data: $10 per GB, the same price as in the US, billed by what you actually use;
• Texts: free;
• Calls to Chinese numbers: 0.06 yuan a minute over Wi-Fi, 1.2 yuan a minute without it.

Early this morning, Google announced it was raising speeds overseas: Fi abroad will no longer be capped at 256kbps and will run at 3-5 Mbps instead. Not fast, but that is what international roaming feels like.

Fi's obvious shortcoming is that it works with only three Nexus phones (Nexus 5X, Nexus 6, Nexus 6P). If you want to use it in China, the bigger problem is that you have to insert the SIM card inside the US to activate the number.

One year after launch, Google's Project Fi has gone from an invite-only test product to a carrier of the future you can use anywhere in the world.

How Project Fi differs from other carriers

Google Fi is, put simply, a virtual carrier service. A virtual carrier is a small "carrier" that rents network capacity from the big ones, buys data and resources wholesale, then repackages and resells them. It doesn't build cell towers, and it mostly doesn't control the equipment or the technology — hence "virtual."

Like every virtual carrier, Fi delivers everything it offers through deals with mainstream carriers.

The US has four nationwide carriers: Verizon, AT&T, T-Mobile and Sprint.

Google signed partnership agreements with the two weakest performers, Sprint and T-Mobile, and last month added a smaller regional carrier, U.S. Cellular.

Virtual carriers are usually small companies working the corners the big carriers can't be bothered with. AT&T, for instance, requires you to buy your phone from AT&T to get service; the phone is discounted, but the monthly fee is high. Virtual carriers take another route: H2O, which rents AT&T's network, mainly sells short-term plans to travelers who bring their own phones, with no service contract required.

Google is a different kind of company. It is worth more than all four major US carriers combined. And Fi's rates are competitive:

Google Fi's plan is a fixed fee, but if you don't use up the data it covers, the leftover money comes back to you in proportion.

Fi can be used freely in 135 countries, and as of July 13 its download speed while roaming abroad has been raised to 4G levels. Unless you settle for 2G, every other carrier's data costs at least 10 times what Fi charges.

Behind the price gap is Fi's technology.

Fi is a carrier driven by software

Project Fi works with three carriers: Sprint, T-Mobile and U.S. Cellular. Sprint and U.S. Cellular run CDMA 3G and LTE; T-Mobile runs WCDMA 3G and LTE.

None of the three is as big as Verizon or AT&T. Unlike in China, even the largest US carrier's coverage is not as complete as China Mobile's.

This is the 4G coverage of five US carriers; swipe to see them all. They are Verizon, AT&T, T-Mobile, Sprint and US Cellular.

A virtual carrier can switch among the different networks it rents, according to signal strength.

Dr. Liu Junda, the technical lead for Google Project Fi, told QDaily that Project Fi not only switches networks on its own, but holds a call open while it does.

Unlike an ordinary carrier's SIM card, Project Fi's SIM has to be activated inside an official Nexus phone. The reason: Google built the carriers' network configuration files into Android 5.0 and later, making them part of the operating system rather than something stored on the SIM.

That lets a phone move between networks faster than a traditional SIM card can.

Google also works with baseband chipmakers — Qualcomm, which supplies the baseband for the Nexus line, among them — to change network settings on the fly. By Google's account, switching between LTE and CDMA used to take two minutes of searching and registering; now it takes 10 seconds.

There is a less publicized detail in how Fi behaves abroad. Even if you turn off your phone's system roaming option, Fi still works in most countries, and data costs the same as in the US.

All the data Fi carries during that time is encrypted through a dedicated VPN. In other words, your data passes through other carriers' networks, but those carriers can't read it.

Google makes its money from search, so it seems relaxed about mobile data. Besides switching between mobile networks, Fi can also hand you off to public Wi-Fi.

This isn't Google's first try at the carrier business

Google's earliest attempt was Google Voice, an internet calling service much like Skype, except that it could be tied to a phone number.

Early Google Voice sold itself on one feature: a virtual number, so you could use several numbers on one phone.

After 2014, Google Voice and the chat app Google Talk were folded into Google Hangouts, one app that could place calls, send texts and carry on online chats over both the cellular network and the internet.

Google Voice can be read as Fi's predecessor. When you activate Fi today, the system asks whether you want to keep your old Google Voice number, and on the web version of Google Hangouts, the default option for placing a call has already changed to Google Fi.

Google's other basic carrier service is Google Fiber, a wired broadband network Google built itself, first switched on in Kansas City in 2012.

Google Fiber offers symmetric broadband with 1Gbps of download and upload bandwidth. When it launched in 2012, there was no installation fee: $50 a month bought 1Gbps, and the slower, ordinary tier was free.

Google Fiber's outrageous bandwidth and pricing prodded other American carriers into action. Comcast launched 1GB broadband afterward, and Time Warner and AT&T both raised their own access speeds.

But Fiber has not grown quickly. Since its 2012 debut it has reached only six US cities.

On the strength of the cities it does serve, Fiber is said to have brought in decent revenue, making it the second most profitable service at Alphabet, after Google itself.

Digging up streets and laying fiber from scratch takes time and money. Google has been buying up small carriers, but Fiber still moves very slowly.

Fi learned from Google Voice and Fiber

Google Fi is a "virtual carrier" and doesn't need to build cell towers. By working with the big carriers, it can get into business fast.

Google's strategy for choosing partners is plain enough: it picks the carriers that need the money most.

And it hasn't gone after the traditional carriers' business head-on.

When Fi launched in 2015, sign-up was by invitation. Only in March this year did Fi open to the whole country, and even then users could activate it on just three Nexus phones. That is clearly a compromise Google made to avoid provoking the other carriers.

Fi also fixed what was wrong with Google Voice, which was too complicated and made you go to a website for everything. As a service anyone can use, Fi asks almost nothing of you. Google mails you a SIM card, and you activate it the way you would any phone.

Changing your plan, pausing service and the like are simple, and can be done in the phone app. For anything more complicated, such as changing your number, Google's customer service calls you to sort it out.

Google has never lacked the appetite for building infrastructure

For a pure internet company, Google has a long habit of building infrastructure.

After the dot-com bubble burst in 2000, Google bought cheaply from the many internet companies that went under: fiber-optic cable and servers by the ton, which it used to build its own server centers. Google was also the first internet company to build data centers of its own.

It was the first to design its own server hardware, too. Most internet companies buy their servers from Dell, HP or IBM; Google became one of Intel's main customers, buying processors in bulk and having contract manufacturers such as Pegatron build servers to its own specifications.

Business is not good for the traditional carriers today:

Swipe through to compare the results of Google and the four other major US carriers.

After spending 100 billion to build out 4G networks, they watched games, video, music and advertising earn enormous sums on phones. Almost all of that money went to internet companies. The carriers collected the data fees.

Investment that doesn't pay off slows the carriers down when it comes to funding the next network. There is still no sign of 5G anywhere.

Google, on the other hand, makes money from the internet spreading. The less its users worry about their data, the more Google earns.

Facebook, also an advertising company, thinks the same way. This month it released OpenCellular, an open-source hardware platform. In Facebook's design, this cheap base-station box can provide 2G, LTE, Wi-Fi and other networks, so people can text, call and use internet services.

Historically, Google's favorite way to grow a new business has been to buy one outright. Its phone operating system (Android), its video service (YouTube), its smart home business (Nest) and even its advertising system were all acquisitions first.

Google Fi has grown quickly as well. Small-scale trials began only in April 2015; today it has three partner carriers and offers high-speed service worldwide.

If the traditional carriers can't push infrastructure forward, it isn't hard to imagine Google using a more mature Fi to buy a fading carrier and enter a new market.