Two things become important: Acquisition Costs and Customer Retention. Carriers don’t look at Retention metrics because the Street doesn’t. But that should change. Acquisition costs in a flat market are big. (Look at VZ FiOS costs to get TV customers, another flat market).

One of the biggest acquisition costs is the phone subsidy. It would make sense to let the customer buy his/her own phone. No subsidy cost.

Plus it is a “Green” maneuver. No phone added to the landfill.

http://tinyurl.com/2znnro

I have to agree with the scenarios Steve Haney laid out, with one exception:

“And device makers (other than Apple and possibly Palm) don’t have REAL retail presences for their unlocked GSM phones.”

Apple has their own stores, but they’re not selling any unlocked phones that I’m aware of.

Charging subscription fees for data that is freely available on the web is not a sustainable business model as the two platforms converge. The Network Operators are all scrambling to figure out how to continue controlling these services without becoming obsolete in the face of Google’s actual openness.

They’ve found the right word (open), but they had better start taking some action before Google pwns mobile phone software and services.

The only way they’re ever going to truly open their networks is if Google overpays in the Spectrum auction, prostrate themselves before the marketplace with flat-rate pricing for voice and data, and let you bring-your-own-phone.

Even then, the notion of “Phone-as-PC-platform” that we’re all dreaming of is unlikely to occur thanks to the difficulty for small, innovative developers to build and distribute software into the ongoing diaspora of Mobile phone OS platforms, which Google has now merely worsened.

The only thing worse than no common framework at all is a common framework that sucks: Seen J2ME?

-Ian.

And device makers (other than Apple and possibly Palm) don’t have REAL retail presences for their unlocked GSM phones. They don’t aggressively promote to consumers that they can buy their products and put their SIM card in them. In Europe, it is pretty common in carrier retail stores to have three prices EXPLICITLY advertised for a device: contract price, locked price and unlocked price. Consumers get to chose.

Next is the carriers who have to take their weird pricing plans and rationalize them. All the texting and MMS packages stuff has to go away. Make it like the iPhone (or any landline broadband contract): you have a price for voice and a price for data. Simple. (Yes, I know they want to keep their high margin, proprietary messaging offerings, but the way the pricing is done is destructive overall.)

For GSM networks in the US, this whole “openness” thing could be made very clear with a few alterations in business plans and a couple of months of marketing. And the carriers could still maintain the margins they are used to. There is no reason I shouldn’t be able to pop into an AT&T store and buy my HSPA broadband SIM with a reasonably priced plan. Then go buy whatever GSM phone I want (assuming the manufacturers actually marketed them to me), and then just go. People are making this hard, the technology is not making this hard.

Operators do provide some value in terms of customer service for handset makers, and I am not sure why or how transitioning to a PC/consumer electronics will be so great for users….