Sunday, June 1, 2008

Consumer Freedom and Choice in US Wireless market. Is it here yet?

Yes my dear friends, I have been in radio silence for the last few weeks due to a number of reasons. Over the last few months we have been busy at work at our mobile startup travelling and meeting people from NY to CA. We have spoken to a number of people about our project and assessed our current tack. We are also running into road-bumps and challenges that most every startup faces. Our market validation has proven that there is a need for the type of product that we are building. Well, enough of that. Lets move on to what I want to talk about now.

During a recent trip out to California to attend the TIECON conference, I sat through a panel discussion featuring some big-wigs from the telecom industry. During the open Q&A portion of the session, I sent in my SMS question to the panel and asked this of them: "Do you think that the american conusumer has the best experience and choice when it comes to wireless services"? Most people on the panel which featured representatives from multiple carriers and others including Google, agreed that the American consumer does not have the best in service, technology and choice when it comes to wireless services. For ex: Until recently consumers had to pay steep fees of upto $ 175 to change or stop the service midway through the contract. For years, carriers have charged steep fees as a means to either recover their costs for subsidizing the phones early on or to prevent churn. Another issue is that the American consumer has to buy the phones that the carrier issues. In most other developed and developing countries, you can walk into a store, buy a phone of your choice and then get service from the carrier of your choice. Once again, consumer choice is limited by this. Recent press announcements by Verizon and their CEO's words from the recently concluded D6 conference suggest that this control is on its way out and that real consumer choice with respect to handsets is coming soon. You can watch some of the video excerpts from the event at

The other area of concern is the control exercised by the carrier in terms of what software you can actually load onto a device. With the advent of feature rich smart phones, these devices can do a lot more than regular phones. I mean these smart phones are actually mini mobile computers. Up until recently, carriers exerted control over what software one could load on these devices maintaining that it was imperative that any 3rd party software not jeopardize the phone operation. For a carrier the ability of the device to make or receive that call is very important. Due to this reasoning, many innovative third party companies had to play by the carriers' strict guidelines. In this "pay to play" scenario the carriers wanted the software manufacturers to charge the users for the software. For many innovative companies that may have not been the ultimate business model. This made it difficult for many of them to survive or succeed. Most recently, at the same D6 conference (, Verizon Wireless' CEO announced that by the end of this year (2008), they will have a two day turn around on certification of 3rd party software. This would enable consumers to download any certified application and use it. This quick turnaround in the certification process would enable innovative new companies to develop smart new applications, have them quickly certified and available for release to mobile phone consumers. Only time will tell if Verizon will keep to its word.

Change is visible on the horizon and many things are moving in the right direction. But any change in the communication arena is a slow process in the US.