November 5th, 2007
Google phone won't pry open wireless business models
The speculation has begun about today’s big Google Phone announcement.
Larry Dignan says this will ding the business models of current wireless carriers.
How exactly?
What is being described is a Linux-based phone that may have WiFi and is tied to Sprint. Just as the Apple iPhone is tied to AT&T.
I have Sprint. I use Sprint. I hate Sprint.
Before you can get any data service from Sprint you have to buy a voice plan. That’s a designated number of minutes for a designated price per month, and if you go over, you lose.
Then you have to buy PowerVision. This is a $10-20/month charge Sprint rakes in for turning data services on. When I got a Sprint phone this spring, I got charged for this even though the phone didn’t support data services. For six months.
Want broadband? That’s another $60/month.
Oh, and if you want service, Sprint is the FEMA of mobile phone companies. OK? This is personal experience talking. The stores can’t do anything, they don’t stock anything, all they do is sell, and the only way to get a human is on the phone. Even then you may have to burst a blood vessel in your neck to get anything done.
So, if you get the cheapest possible voice plan, don’t go over your allotted minutes, and add in the broadband service you really need to make a data-phone like this useful, you’re already paying $150-200/month. Sure, Google may have you turn advertising on, and you’ll get a discount for that, but not much. Not that much.
And when it comes to terms and conditions of service, Verizon is worse.
The U.S. has a shared monopoly in wireless service, with two companies dominating (the same two that control phone and Internet service) and two other phone operators scooping up the leftovers.
The only route to basic change is either through out-bidding the monopolists (and their beards) for spectrum or by taking on the political struggle necessary to break up the monopolies entirely.
Right now, Google, Microsoft, Apple and the other tech giants have the financial muscle to win the political battle, if they share the load and commit to it. But give the monopolies a few more years of profits and that may no longer be the case. AT&T is bringing 10 cents on every dollar to net income, thanks to its lobbying prowess, and people will pay for that.
So color me skeptical.
Dana Blankenhorn has been a business journalist for 30 years, a tech freelancer since 1983. You can follow Dana on Twitter. See his full profile and disclosure of his industry affiliations.
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| 11/05/07
