I’m Free to Be What I Want, On Any Old Pipes!

Reading the news and analysis about Google’s Android and OHA announcements this week, I was reminded of a good rule of thumb in networking technology and telecom services - “simple wins, cheap wins, open wins.” An Android-based phone has all three - it’s easy to use (it’s Google), inexpensive (no or little embedded software cost) and completely open - giving it a serious competitive advantage. While most of the media coverage has focused on Android’s threat to mobile OSs and handset manufacturers, I’m more interested in the threat to carriers.

One of the reasons carriers are struggling is because they tend to fall on the wrong side of all three criteria in the “simple, cheap, open” rule of thumb. They offer arcane technologies (how many times have you used call forwarding from home?), closed systems, (”Available only from [insert carrier here]!”) and expensive services. This model ensures carriers maintain control of service innovation and even more importantly, avoid becoming “dumb pipes” on which valuable services ride but don’t contribute revenue. That’s the real competitive threat of an Android-based phone - the Android platform will take services and service innovation out of the hands of the carriers. What happens to all of those ARPU growth promises from video services if the services become an application in the phone instead of the network? With Android and the OHA, Google is showing carriers the doorway to “dumb pipe” land.

Carriers don’t have to walk through that door but they do have to wake up to the threat and open their systems to the entrepreneurs of the world. If they don’t, they will become just another commodity provider and have no one to blame but themselves.

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