In a post titled "The Times they are a Changin'", I provided a very brief history of the wireless industry to make the point that the large carriers are moving in a direction favorable to consumers (Interestingly, several days later in the November 26 edition of RCRWireless News, there was a front page story titled, "Times are a changing"; this article also discussed the changing landscape of the wireless industry).

Whether the message comes from a humble blogger or a well respected trade publication, the point is clear: New players, new ideas and a growing number of informed consumers have merged to initiate a truly dynamic shift in the business models long used by the large wireless carriers.

For too long Verizon Wireless, Cingular (now AT&T Wireless) and other carriers owned the playing field. They enjoyed heady days where their business decisions went largely uncontested, had little government oversight and resulted in considerable bravado, including Draconian contract requirements, exorbitant pricing and unforgiving terms and agreements.

Examples include charging customers confiscatory early termination fees (ETF's), requiring two-year contract extensions when a customer changes their plan, exorbitant text message pricing, locking their respective phones to limit consumer access to only those features which the company could profit from, etc.

However, over the past 24 months there have been clear signs of bravado giving way to a shrewd humility. Price plans have improved, Verizon Wireless now prorates their ETF's (with AT&T following suit in 2008), customers can now change plans without being forced to sign a new two-year agreement, and Verizon Wireless and AT&T Wireless have publicly announced that customers can use their networks for unlocked phones purchased elsewhere.

Perhaps most interestingly, Google has entered the wild world of wireless with the development of Android, a superior operating system that promises rich functionality and ease of use that puts the carrier's operating systems to shame.

So why the change of heart? Why are U.S. carriers embracing more customer-centric policies and open-ended operating systems? Why is it that Verizon has gone from taking Google to court several months ago to teaming up with them for upcoming business partnerships?

Are these changes the result of "Carrier Kindness" and a deep concern for core guiding principles as they relate to their beloved customers?


It is this writer's opinion that the large carriers have seen the writing on the wall. In a preemptive strike to head-off suffocating government regulation, they have chosen to voluntarily make small concessions, such as prorating ETF's and no longer requiring absurd contract extensions when a customer wants to make a simple change in their plan.

Both Verizon Wireless and AT&T Wireless have core guiding principles that are inherently at odds with themselves. Both companies believe in putting the customer first, and both companies wish to be the premier choice among consumers. But they are also in the business to make money. And therein lies the intellectual friction that belies their stated values.

For example, if a companies goal is to provide the best products and services, then those products would be unlocked devices with dynamic operating systems and the ability to download applications from third party vendors. Instead, as we have seen, both Verizon Wireless and AT&T Wireless have created their own respective "web experiences" that are crunched-down, uninspired representations of the internet, with locked doors everywhere you turn. You cannot access the internet and download iTunes and enjoy the pleasant, easy Apple song-buying experience. Instead you have to go to THEIR self-made song-sites, buy THEIR songs at THEIR prices.

The same is true for purchasing wallpapers and ring-tones.

So how is this policy putting the customer first? The answer is: it's not. It's nothing more than wireless providers trying to dominate the entire cell phone experience, charge a premium for every purchase, and treating informed adults as children.

Smart companies know what they are good at and what they are not good at. Slowly, the carriers are moving away from what they are clearly not good at and are beginning to play to their primary strength, namely, to be a viable, reliable wireless service provider. Rather than hoard profits by attempting to dominate all aspects of their customer's cell phone experience, they are beginning to forge partnerships with companies that can do "that other stuff" better.

The industry used to be comprised of the cell phone carriers and the cell phone manufacturers. But now there are new, smart niche players, who can provide far superior offerings, and the carriers, in an effort to remain relevant, have been humbled, indeed schooled!, into reassessing their prior business models.

Companies such as Helio have developed innovative business models and their products, such as the new Helio Ocean, demonstrate tremendous value, functionality and imagination. Helio, of course, is NOT a wireless carrier company. It does not own it's own network. However, the big two carriers could learn a lot from Helio when it comes to what it means to make money as a company and provide a fantastic device for consumers which, rather than limit their experience, takes it to a whole new level.

Proprietary software and services are out. Open-access is in.

Whether the large carriers decide to change with the times themselves, or are dragged kicking and screaming, either way it doesn't matter to me. In the end, more players means more options, more and better services and functionality, and a business model that really can deliver both profits and an optimized customer experience.

I welcome your comments.