Verizon Plans to Provide Open Access

Per the FT at http://www.ft.com/cms/s/0/d72cea8a-9d1a-11dc-af03-0000779fd2ac.html
And the Wall Street Journal at http://online.wsj.com/article/SB119617188870905241.html?mod=telecommunications_primary_hs

It appears Verizon decision is probably in reaction to the Google Android plans. But then to come up with such a plan within such a short time without the possible thought of it before does not make sense – which makes me think that Verizon had something in process already and the Google decision just accelerated that process.

In a wireless world, the customer is owned by a service provider. Per this announcement from Verizon, devices one chooses to operate remains at the discretion of the end users. This will reduce the distribution costs of service providers at the same time reach out to users who were not their customers by providing them choice of handsets.(Not sure the revenue lost from giving away the distribution channel, as the operators will still distribute the most popular models.) This could result in increased competitive intensity and change in channel mix for mobile devices manufacturers.

By announcing the program it appears Verizon wants to control the user experience. Verizon could then use this to negotiate with Google and other application vendors to share the revenue from online advertising and usage of applications.

A better option would be for both Google and Verizon to work on a converging framework for the software that would be incorporated in the mobile devices – this would help reduce the investment needed by both Verizon and Google, reduce time to market for mobile devices, make available lot more innovative applications that could be accessible via the mobile device – all this is a possibility so long there is an agreement on the revenue split online advertising and use of other tools and applications. Depending on the perception of who owns the customer will shift the balance of power at the negotiating table. Android of Google and the ‘Open Access’ plan from Verizon is trying to do just that – prove that each has plans to own the mobile user. Time will tell who gets the better of the other.