THE demise of the $US95 billion ($108 billion) US mobile phone industry as we know it is not quite imminent, but if the events of the past week are taken at face value, it seems a lot closer today than it was last Tuesday.
First Verizon Wireless, the second-largest US mobile phone operator, announced it would open its network to devices or applications bought by users from third parties, as long as they met its required technical standards.
While this is only the first step towards a wireless marketplace that encourages far more innovation and choice, it is significant because Verizon Wireless (55 per cent owned by its namesake parent and 45 per cent by Vodafone) has until now been the major player most resistant to growing pressure for openness from wireless consumers, regulators and firms such as Google and Microsoft.
Verizon's move was followed three days later by public confirmation that, as anticipated, Google will bid in the Federal Communications Commissions auction next month of the nationwide 700 megahertz spectrum being vacated by the US television networks. This potentially positions Google to exercise immense influence over the future direction of the US wireless and broadband markets either by working with partners to roll out services with dramatically different pricing models (probably supported by advertising and more use of low-cost voice-over-IP), or perhaps even by operating a wireless network itself.
As a result, the four major (and hugely profitable) US wireless carriers - ATT, Verizon, Sprint Nextel, and T-Mobile - face an upheaval that will erode their margins, curb their control over the devices and services using their network, and eventually force them to scrap their current revenue model.
Verizon's announcement should be viewed cautiously until its minimum requirements are spelled out and it becomes clearer how open it really intends to be.
While in part triggered by Google's looming threat, at least the move is an attempt to get out in front of painful market changes, rather than being dragged along.
Combined, the two events are definitive evidence the command and control approach the telephone industry has pursued for most of its history, and which US wireless carriers insist is still the only way to guarantee reliable service to customers at all times, is quickly crumbling.
source:http://www.australianit.news.com.au