6 ms·

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 / m

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?

nevir 11y ago
It lets you impose a upper limit of how much you want to spend (I think)
- RKearney 11y ago
  Not quite. Per the FAQ[0] > 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. [0]: https://fi.google.com/about/faq/#plan-and-pricing-4 https://fi.google.com/about/faq/#plan-and-pricing-4
MBlume 11y ago
People think they don't want to pay by the megabyte, so they're calling it something else. Also the plan provides a cap so that you know you're not going to pay more than $X per month without going to some app and adjusting something.
- ElijahLynn 11y ago
  There isn't actually a cap. 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." source: https://fi.google.com/about/faq/#plan-and-pricing-4 https://fi.google.com/about/faq/#plan-and-pricing-4
yellowapple 11y ago
Or better yet: why aren't they offering an unlimited data plan like what T-Mobile and Sprint (Google Fi's "partners") already offer? Why aren't they even at least going with T-Mobile's approach of "throttle the connection once you go past your data cap, but don't charge overages"? 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.
- codezero 11y ago
  My best guess is that these carriers regret offering unlimited data.
  - Dylan16807 11y ago
    I see a lot of new offerings that have unlimited slow data. I doubt they regret it; it gives people peace of mind while still giving them incentive to upgrade.
    - derefr 11y ago
      Unlimited slow data is kind of cool. But unlimited, really slow, and free data (like the Kindle's Whispernet) is awesome. It's great to never actually be stuck completely without network access, even if you're somewhere your usual provider doesn't even exist. 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.
  - yellowapple 11y ago
    If they regret offering it, then they'd get rid of it like AT&T did. 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).
maxerickson 11y ago
I expect that it is prepaid and that they will require you to prepay an amount that matches your typical usage in previous months (based on whatever method of measuring).
foobarqux 11y ago
They invest the float. edit: Removed reference to cash conversion cycle because it doesn't really have anything to do with that.
- miahi 11y ago
  It's Google, they have plenty of cash, do they really need to invest the float of a $20 data plan?
  - foobarqux 11y ago
    No, they could make a business unit less profitable than it could be. They can also afford to throw money away, it doesn't mean that they should.
    - Dylan16807 11y ago
      The point is they don't need to do that to such an extent that it will affect the plans offered. It's a nice bonus, but no more than a bonus.
- pbhjpbhj 11y ago
  I find this sort of thing really quite clever - I wonder how much of a factor it is in the decision process, do they tailor it in specifically or is it just a nice extra; what sort of money are we talking? 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?
  - 11y ago
richdougherty 11y ago
They're equivalent plans, but people have cognitive biases. Here are a couple of explanations from Propspect Theory: - 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_theory http://en.wikipedia.org/wiki/Behavioral_economics#Prospect_t...
iamdanfox 11y ago
I bet there would be a psychological impact. People would curtail their usage and frantically switch antennas on and off, resulting in an overall poor experience. Perhaps having a big allowance in mind just encourages people to use their data!
cbhl 11y ago
Ting Mobile (https://ting.com/rates https://ting.com/rates) uses this exact pricing model (1.5 cents per megabyte) above and beyond 2 GB of usage.
- bougiefever 11y ago
  Been using Ting for a while now. When you use a lot of data in a month, you definitely pay more. One month I used 10 GB of data, and my bill was $200. It's still less than when I had a contract, but I don't get phone upgrades unless I go buy a new phone.
daigoba66 11y ago
It's incredibly useful for household budgeting purposes. Knowing that, at most, I can expect to pay $xxx per month for a service makes estimating expenses easier. 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.
bduerst 11y ago
Maybe it's a purchasing nuance with the data supply chain? 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.
- rizwank 11y ago
  It's a CC charge issue. You get incremental costs per CC charge. Better, in Googles mind, to overcharge and refund rather than a new charge every 100mb.
sliverstorm 11y ago
Perhaps because all the other carriers sell you X GB per month, so they want their plans to be easily comparable to the layman? 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.
Gustomaximus 11y ago
This carries benefit for both the business and consumer; 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.

nevir 11y ago

It lets you impose a upper limit of how much you want to spend (I think)

RKearney 11y ago
Not quite. Per the FAQ[0] > 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. [0]: https://fi.google.com/about/faq/#plan-and-pricing-4 https://fi.google.com/about/faq/#plan-and-pricing-4

MBlume 11y ago

People think they don't want to pay by the megabyte, so they're calling it something else. Also the plan provides a cap so that you know you're not going to pay more than $X per month without going to some app and adjusting something.

ElijahLynn 11y ago
There isn't actually a cap. 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." source: https://fi.google.com/about/faq/#plan-and-pricing-4 https://fi.google.com/about/faq/#plan-and-pricing-4

yellowapple 11y ago

Or better yet: why aren't they offering an unlimited data plan like what T-Mobile and Sprint (Google Fi's "partners") already offer? Why aren't they even at least going with T-Mobile's approach of "throttle the connection once you go past your data cap, but don't charge overages"? 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.

codezero 11y ago
My best guess is that these carriers regret offering unlimited data.
- Dylan16807 11y ago
  I see a lot of new offerings that have unlimited slow data. I doubt they regret it; it gives people peace of mind while still giving them incentive to upgrade.
  - derefr 11y ago
    Unlimited slow data is kind of cool. But unlimited, really slow, and free data (like the Kindle's Whispernet) is awesome. It's great to never actually be stuck completely without network access, even if you're somewhere your usual provider doesn't even exist. 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.
- yellowapple 11y ago
  If they regret offering it, then they'd get rid of it like AT&T did. 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).

maxerickson 11y ago

I expect that it is prepaid and that they will require you to prepay an amount that matches your typical usage in previous months (based on whatever method of measuring).

foobarqux 11y ago

They invest the float. edit: Removed reference to cash conversion cycle because it doesn't really have anything to do with that.

miahi 11y ago
It's Google, they have plenty of cash, do they really need to invest the float of a $20 data plan?
- foobarqux 11y ago
  No, they could make a business unit less profitable than it could be. They can also afford to throw money away, it doesn't mean that they should.
  - Dylan16807 11y ago
    The point is they don't need to do that to such an extent that it will affect the plans offered. It's a nice bonus, but no more than a bonus.
pbhjpbhj 11y ago
I find this sort of thing really quite clever - I wonder how much of a factor it is in the decision process, do they tailor it in specifically or is it just a nice extra; what sort of money are we talking? 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?
- 11y ago

richdougherty 11y ago

They're equivalent plans, but people have cognitive biases. Here are a couple of explanations from Propspect Theory: - 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_theory http://en.wikipedia.org/wiki/Behavioral_economics#Prospect_t...

iamdanfox 11y ago

I bet there would be a psychological impact. People would curtail their usage and frantically switch antennas on and off, resulting in an overall poor experience. Perhaps having a big allowance in mind just encourages people to use their data!

cbhl 11y ago

Ting Mobile (https://ting.com/rates https://ting.com/rates) uses this exact pricing model (1.5 cents per megabyte) above and beyond 2 GB of usage.

bougiefever 11y ago
Been using Ting for a while now. When you use a lot of data in a month, you definitely pay more. One month I used 10 GB of data, and my bill was $200. It's still less than when I had a contract, but I don't get phone upgrades unless I go buy a new phone.

daigoba66 11y ago

It's incredibly useful for household budgeting purposes. Knowing that, at most, I can expect to pay $xxx per month for a service makes estimating expenses easier. 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.

bduerst 11y ago

Maybe it's a purchasing nuance with the data supply chain? 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.

rizwank 11y ago
It's a CC charge issue. You get incremental costs per CC charge. Better, in Googles mind, to overcharge and refund rather than a new charge every 100mb.

sliverstorm 11y ago

Perhaps because all the other carriers sell you X GB per month, so they want their plans to be easily comparable to the layman? 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.

Gustomaximus 11y ago

This carries benefit for both the business and consumer; 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.