In last week’s Wall Street Journal Personal Technology column Walt Mossberg pointed out that U.S. mobile phone carriers are interfering with the high-tech industry’s product cycle for mobile devices and software. He referred to the mobile carriers as “new Soviet ministries” because of their insistence on controlling “the flow of new technologies into users’ hands”.
Examples of this on the hardware side are the hundreds of GSM-compatible phones that are available in Europe and Asia that would work fine on T-Mobile or Cingular, but are almost impossible to obtain because they are not approved by either carrier. Authorized dealers won’t carry them, in part because they would not be subsidized by the carrier.
There are also many examples of software and services that are unavailable here in the United States. You’ll notice that the most successful services based on text messaging here are free services like Google SMS and Dodgeball. Elsewhere in the world, users pay a small charge on their wireless bills for most succesful text messaging-based services.
Everyone I talk to in the industry says that the biggest reason for this difference is that the carriers in the U.S. have operated a closed text messaging system historically, and that people who wanted to offer pay services that appeared on the user’s phone bill had to partner with or license their technology to each carrier.
There are also numerous situations where carriers demanded that key features of handsets be witheld from users, and manufacturers complied. The most notorious example is Verizon Wireless’ version of the Motorola V710.
I agree with Walt Mossberg that mobile phone customers in the United States would be better off if the carriers didn’t try to control the market for handsets and value-added services. In a more perfect mobile phone market, we’d force the carriers to change the handset distribution model and do away with subsidies. Of course, that would destroy the handset market as we know it today.
I only think that significant change will take place if many major developers of mobile phone products and services shift the focus of their development to Europe and Asia. I don’t think that this has taken place yet in a profound enough way to get U.S. regulators and politicians to sit up and take notice. Until that time, I think the market will continue as it is.