The march of the telecom industry towards open-ness and metaphorical plug and play continues. After holding back to supporting Google’s Android Platform for a few weeks, Verizon Wireless today announced its support to the platform in allowing Android based devices on its network. According to Business Week, Verizon Wireless CEO Lowell McAdam today announced ” We are planning on using Android. It is an enabler in what we do”.
According to the article, McAdam who has spent time in both Europe and Asia was the prime mover for the Verizon Wireless volte-face – given his experiences on open telecom practices in these two regions.
To me it would make strategic sense for Verizon Wireless with its reputation in the United States of being the most reliable wireless provider with the strongest network infrastructure – it can increasingly count on the less nimble wireless providers to continue losing subscribers ( read, Sprint) – now that subscribers dont have to lose the phones and devices they were already using with other CDMA based competitors.
On the other hand, adherence to Android introduces a world of third party application developers to produce an overall consumer experience that Verizon Wireless would not only be unable to replicate in a closed environment given constraints of financial commitments and lack of specific expertise.
Since wireless providers (save ATT, which has hung on, probably based on its recent iPhone backed performance) would essentially become voice and data pipes – it raises a question – since most revenue growth of the future would be data-driven – which companies would be best positioned to exploit the explosive growth in data based devices and services just round the corner.
Logic would say there are two components involved in this – a blanket coverage in much of the continental United States and data throughput rates. With Google in the fray for the 700Mhz auction (which it can use to build those data channels), Verizon committed on the LTE initiative (which does not provide true 4G data throughputs till 2012) and Sprint hedging its bets on Wimax ( true 4G) – I think, if properly managed, implemented and delivered, Sprint, along with Google can be a true value differentiator in the new market environment.
According to Yankee Group’s chief strategy officer Berge Ayvazian, “Sprint has a two year head start on real 4G implementations” – and according to me, perfectly positioned to harvest the benefits of the explosion of third party hybrid devices and services that are going to be developed based on the Android platform.
If Sprint does not spin-off its Wimax initiative (called Xohm) – I predict it stands in an extremely enviable and unique position to exploit the strategic metamorphosis of the telecom industry.
Clearly, apart from Sprint and Verizon, noone seems to have a coherent 4G service based strategy – ATT is still deploying HSDPA (and its EDGE is pokey at best), T-Mobile does not have any 3G offerings to speak of (though they plan 3G deployments this year – too little, too late again) and the regional providers dont have data in their play currently, being more focused on retaining regional subscribers with solid voice based coverage and innovative price plans.
Again, stay posted on this forum for further updates and analysis.