Monday, December 3, 2007

Verizon's open network move

Last week Verizon wireless declared that it will open its network for any compatible device starting sometime next year. Verizon hasn't published the exact nature about this openness but in general this is a great move by the US carrier. In Europe & Asia carriers already allow their customers to choose compatible devices from variety of handset makers & have custom made applications running on those devices. It's like choosing your own computer & plugging it to the Internet with any applications running on it. Though in the US; there are 2 camps of wireless technologies. One running on CDMA & the second on GSM. Among the dominant US carriers Sprint & Verizon use CDMA while AT&T uses GSM technology. So only CDMA devices will be able to operate on Verizon network. In Europe & Asia, GSM being the dominant technology you can roam in those countries by just changing the SIM card. But as 3G (3rd Generation) & 4G (4th Generation) technologies evolve it's not about voice anymore, but its also about data. One of the main advantages of 3G networks is mobile broadband so you can bring desktop experience on your cellphone. There are already GHz application processors going into cell phones & your cell phones are becoming your mobile computers rendering voice, Internet surfing, productivity applications, Mobile TV, gaming & mobile wallet experiences to us. There is convergence of GSM & CDMA technologies for 3G & 4G (called WCDMA & LTE respectively), which means 4G devices working on Verizon network will also work on Vodafone Europe network & on Bharti Airtel India network delivering seamless roaming experience around the world. Google has already unleashed its open source Android platform for cell phones. The combined pressure of Goggle & Verizon will further foster open source software & hardware development for wireless standards. This would ignite the new wave of innovation & allow anyone to build a phone in their basement, put some new apps on it & get it out on the network. There are some roadblocks in the short term. Currently the wholesale price of a cell phone sold to the carriers is around $220, it could cost an end user around $300. The carrier subsidises the device for you to give it free but in turn gets you to sign a 2-year contract. I guess consumers will continue to sign the contract for sometime in order to get free phones but this picture would change once low cost attractive handsets appear in the market, just as it happens in India. In general its a win-win situation for everyone in this domain & off course for us consumers..

No comments: