WirelessWeek

Open Networks Can Be a Carrier’s Friend

By Evan Koblentz

April 09, 2008

The trend toward open networks may be daunting for some wireless carriers, but there are reasons why it can be a very positive development, according to telecommunications consultancy Cambridge Strategic Management Group’s (CSMG) latest report, Mobile Handset Industry Outlook: Impacts of the Shift to Open Mobile Models.

“The example we detail in the study is the iPhone, where AT&T has given up more control than traditionally it has had in product development,” said co-author David Young. “We do expect to see other deals that are similar in that they’re targeting niche customer sets, a really innovative product, and maybe even with a well-known consumer brand, but each one is going to be different. There are relatively few companies that are as well-suited to do what Apple did,” he said.

It’s likely that future deals will be “less sweeping but just as economically interesting,” Young said. For example, they could be application-specific, he said.

“Nothing’s going to stop convergence, but this idea of secondary device types, maybe that people carry in addition, or that are for a specific market – we think that idea has real traction. We believe the most successful model going forward, the most disruptive model will be partnering with carriers. I think the real challenges are finding opportunities for revenue stimulation and cost avoidance,” he said. There has been plenty of emphasis on new revenue ideas but not enough on lowering costs, he said.

“Open isn’t a panacea. There are going to be limits to what an open network can do,” Young noted. Security, complexity and enterprise ISV partnerships will be vital for making open networks truly useful.