The Asian And European Experience Of Open Networks

Verizon’s (NYSE: VZ) announcement that it would open up its network theoretically means a wider variety of handsets available to US consumers (although don’t expect an influx anytime soon). The Wall Street Journal has taken a look at business models around the world, from the equally locked down Japan to the completely unsubsidized China and India. “At any given time in China, there are more than 1,000 cellphone models available on the shelf…Many of those phones are cheap: the least expensive start at about $20 in India and $40 in China.” This is because handset manufacturers can make the phones in bulk without having to customize for each carrier. There are also high-end multimedia phones for those who have the money, and the right brand is seen as a status symbol. The “cheap handset” aspect of the open networks isn’t likely to happen in the US unless all the other carriers follow suit, and even then there’s the GSM/CDMA divide.

The WSJ thinks that Europe is the best example of what Verizon is proposing — people can buy direct from the manufacturer or at a subsidized price from the carriers, but more than 95 percent of people choose to buy the handset through the carrier. It also notes that some people have multiple SIM cards to put in their handset to take advantage of differences in price at different times of the day/location. All in all I agree with Gartner analyst Hugues de la Vergne — the first handsets available for the open spectrum will be high-end handsets targeting a particular niche. I also expect there’ll be a number of hacked phones with different software doing the rounds…

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