It was no coincidence that Verizon Wireless chose to make two major announcements last week-each one laid out a separate step toward a 4G future driven by connectivity for consumer-electronics devices.
Dick Lynch, Verizon Wireless’ CTO, said that the two announcements are “inextricably tied . because they both look to the same vision.”
First, the wireless service provider declared a major shift in its position on non-carrier- offered devices and applications, saying it will begin activating any device that meets a “minimum technical standard” and will allow “any application the customer chooses” to be used on the devices. The carrier said the new option will be available to customers throughout the country in the second half of next year.
“This is a transformation point in the 20-year history of mass-market wireless devices-one which we believe will set the table for the next level of innovation and growth,” said Verizon Wireless CEO Lowell McAdam. He added that the company “is not changing our successful retail model, but rather adding an additional retail option for customers looking for a different wireless experience.”
LTE going forward
Then, Verizon Wireless followed up with its choice of 4G technology-Long Term Evolution-in order to give consumer electronics manufacturers a headsup on which next-generation technology it thinks will dominate the world market.
Verizon Wireless said that while it expects most of its customers to prefer its current model of “full service,” it is “listening . to a small but growing number of customers who want another choice without full service” but still want to have access to Verizon Wireless’ network. And eventually, those customers will be able to use devices that utilize LTE technology as well as Verizon Wireless’ CDMA network.
The wireless service provider said that early next year it plans to publish technical standards for developers to design products that will interface with its current network. The open-access option will be available across Verizon Wireless’ current CDMA network.
Verizon Wireless CTO Dick Lynch said in the conference call that certification testing would focus on basic, network-level functions-not the more rigorous application-layer and user-interface testing that Verizon Wireless requires for the applications and devices it sells as part of its full-service model through its BREW-based platform.
“If somebody has the technical capability of building a device on a breadboard in the basement and they want to bring it to us to be tested, the philosophy and structure of this program says, ‘Have at it,'” Lynch said.
However, the device providers will be on the hook for the fees related to the testing of the device. Lynch did not specify what those fees will be, except to say they would be “surprisingly reasonable” given that many would expect such fees to have “many, many zeros on the back.”
Testing and approval will take place in a Verizon Wireless lab, which, according to the operator, “received an additional investment this year to gear up for the anticipated new demand.”
Also, company executives confirmed that as long as the phones meet the carrier’s CDMA standards, device vendors can choose whatever operating system or application platform they wish.
Lynch said that Verizon Wireless had not made any changes to its network in anticipation of additional customers.
Industry reaction
Shahid Khan, partner with IBB Consulting Group L.L.C., said the success of the initiative will “come down to how simple it is to develop applications and get them certified.”
He noted that while established developers and companies such as Microsoft Corp. may welcome the announcement, this type of open access is still a far cry from the Internet world, where potentially anyone could develop the next killer app and make it accessible to the market.
Both of the Verizon Wireless announcements concern the carrier’s future plans, but the company may reap some benefit from the free publicity during the holiday shopping season. Mark Landiak, president of wireless retail consulting firm Corporate Dynamics and president of the advisory board for the Wireless Business Owners Consortium, pointed out that the open-access promises for 2008 may help the carrier appeal to the “techie” customer who would see such a development as positive, even though it has yet been realized.
“It’s a great idea from the standpoint that they get a lot of attention driven to Verizon for something that they don’t even have,” Landiak said.
Enterprises demand openness
Although Verizon Wireless-and Sprint Nextel Corp., for that matter-have emphasized addressing the consumer space through 4G connectivity, the carriers have likely been getting an earful from enterprise users as well. Nicole Buchanan, VP of the Americas for smartphone device provider i-mate plc, said that business customers also have been demanding more openness from carriers in order to enable them to manage their wireless services on a global basis-and that top-tier North American carriers must respond. A global Fortune 1000 company already has to deal with multiple operators, she said, and often finds that various devices are not available through certain carriers.
“It has created quite a bit of angst for a lot of the enterprises as they’re looking at standardizing,” Buchanan said. “From a business perspective, this is a critical piece of the pie with respect to [carriers] supporting those business customers.”
She also acknowledged that the move toward open access is a boon for companies such as i-mate, by validating the fact that “there are a lot of unique and interesting applications and devices today in the market that enterprises have not been able to take advantage of or have access to, because of the stronghold in this specific market by the carriers. What this tells us is that carriers are actually hearing this and they’re actually seeing that they’ve limited themselves.”
