SAN FRANCISCO(Reuters) – U.S. mobile phone companies have begun to see substantialreturns from delivering data and not just voice, fueled by greateropenness on their networks, industry leaders said on Wednesday.
But top executives of three of the nation’s four largest mobilecarriers also said they are still worried by consumer demands forunfettered freedom to use untested devices or software applications toconnect to their networks.
"You are seeing the bulk of our opportunities really coming out ofnon-voice activities," Robert Dobson, chairman and president ofT-Mobile’s USA unit, said during a panel at a wireless industry tradeshow 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 IndustryAssociation (CTIA), the organizers of the conference, released newstatistics showing that $14.8 billion of U.S. wireless revenue camefrom non-voice services in the first half of 2008. That’s 20 percent oftotal U.S. wireless service revenue and a 40 percent increase over thefirst half of 2007, CTIA said.
The rapid growth in data services has been fueled by the success ofApple’s iPhone with AT&T Inc and a race by rival carriers such asVerizon and Sprint to offer competing phones and data services withtouchscreens 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 chiefexecutive and president of Verizon Wireless. "Would any of you like toput 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 theship," he said, and then painted a picture of a "Wild West" frontierwith unbridled open access.
Consumers have become accustomed to phones that are essentially veryexpensive computers for which they pay little, McAdam said. And he saidcustomers count on the option for "when things go wrong, to walk into aT-Mobile store, a Sprint store, a Verizon Wireless store, an AT&Tstore."
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 haveto pay more for the devices, just like the PC world. When anapplication crashes on your Dell laptop you don’t call your cable modemprovider," McAdam explained.
The picture he painted describes the situation in some countries inwestern Europe, where customers go to stores and purchase phones thatare never "locked" to one provider, but can easily transfer fromnetwork to another. Customers who need support call their wirelesscompanies, which compete head-to-head through price and service fortheir business.
Josh Silverman, chief executive of Skype, the Web-based telephonecalling unit that is the world’s largest Internet phone carrier, saidhe was skeptical about how open conventional U.S. mobile phoneoperators can be.
"I’m not speaking (of) Verizon specifically, but we’ve certainlyseen from carriers that they often say one thing and in practice dosomething else," he told Reuters in an interview on Tuesday.
The Skype executive argued that consumers should be able to pickwhatever combination of networks or devices they like, along the linesof 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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