U.S. mobile phone companies have begun to see substantial returns from delivering data and not just voice, fueled by greater openness on their networks, industry leaders said. Executives of three of the nation's four largest mobile carriers also said they are still worried by consumer demands for unfettered freedom to use untested devices or software applications to connect to their networks.SAN FRANCISCO
(Reuters) - U.S. mobile phone companies have begun to see substantial
returns from delivering data and not just voice, fueled by greater
openness on their networks, industry leaders said on Wednesday.
But top executives of three of the nation's four largest mobile
carriers also said they are still worried by consumer demands for
unfettered freedom to use untested devices or software applications to
connect to their networks.
"You are seeing the bulk of our opportunities really coming out of
non-voice activities," Robert Dobson, chairman and president of
T-Mobile's USA unit, said during a panel at a wireless industry trade
show in San Francisco.
"Unfettered access would be a pretty bad experiment," Dobson said. "There needs to be some stewardship or control."
Industry trade group Cellular Telecommunications Industry
Association (CTIA), the organizers of the conference, released new
statistics showing that $14.8 billion of U.S. wireless revenue came
from non-voice services in the first half of 2008. That's 20 percent of
total U.S. wireless service revenue and a 40 percent increase over the
first half of 2007, CTIA said.
The rapid growth in data services has been fueled by the success of
Apple's iPhone with AT&T Inc and a race by rival carriers such as
Verizon and Sprint to offer competing phones and data services with
touchscreens and hot software.
Others expressed concern that if there was too much freedom interoperability would suffer.
At the same time, Dobson said networks would be "most productive with stewardship and control."
But consumers have a different opinion.
"Let's take a poll of the audience," said Lowell McAdam, the chief
executive and president of Verizon Wireless. "Would any of you like to
put any device and any application on any network?"
McAdam was caught off guard as the audience erupted into cheers, applause and a significant number raised their hands.
"I think we have to be careful to not all run to one side of the
ship," he said, and then painted a picture of a "Wild West" frontier
with unbridled open access.
Consumers have become accustomed to phones that are essentially very
expensive computers for which they pay little, McAdam said. And he said
customers count on the option for "when things go wrong, to walk into a
T-Mobile store, a Sprint store, a Verizon Wireless store, an AT&T
store."
But Verizon's chief executive said that the freedom to hook up devices willy-nilly would mean an end to that.
"In an open environment that's going to change. You're going to have
to pay more for the devices, just like the PC world. When an
application crashes on your Dell laptop you don't call your cable modem
provider," McAdam explained.
The picture he painted describes the situation in some countries in
western Europe, where customers go to stores and purchase phones that
are never "locked" to one provider, but can easily transfer from
network to another. Customers who need support call their wireless
companies, which compete head-to-head through price and service for
their business.
Josh Silverman, chief executive of Skype, the Web-based telephone
calling unit that is the world's largest Internet phone carrier, said
he was skeptical about how open conventional U.S. mobile phone
operators can be.
"I'm not speaking (of) Verizon specifically, but we've certainly
seen from carriers that they often say one thing and in practice do
something else," he told Reuters in an interview on Tuesday.
The Skype executive argued that consumers should be able to pick
whatever combination of networks or devices they like, along the lines
of the computer and Internet industries.
(Additional reporting by Eric Auchard in San Francisco and Sinead Carew in New York; Editing by Bernard Orr)
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