KEY POINTS:
NEW YORK - Verizon Wireless says it will open its network to any phone or software application by the end of 2008, becoming the first major US mobile service to cave in to demands by Google.
Google had pushed for US wireless operators to open up access to their networks by successfully lobbying the US government to make that a requirement for companies wanting to bid in an upcoming auction of wireless airwaves.
US service providers like to keep tight controls over which devices, software and websites their customers use, as they often share the revenue generated. They cite concerns about service quality for unknown devices.
Verizon Wireless, once a vociferous opponent to open access, said in July it would follow the new auction rules - but with the caveat that it could not guarantee how well software it had not vetted would work on its network.
In an about-face, the wireless venture of Verizon Communications and Vodafone Group Plc said it will publish early next year the technical standards for developers to meet for access to its network.
Any device meeting its standards would work on its network and "any application the customer chooses will be allowed on these devices," said Verizon Wireless, the No. 2 US mobile service.
"We as Verizon Wireless place our bets on what applications and devices will be a hit," Verizon Wireless Chief Executive Lowell McAdam said on a conference call.
"At the same time, customers' needs are increasing and diverging. Soon Verizon Wireless will not be able to meet every customer's needs with our specific portfolio of devices and applications," he said.
The move could lessen the need for Google to bid in the upcoming wireless airwaves auction, said Banc of America analyst David Barden, who also noted that Google was developing its own mobile phone software.
"In this instance, we see Google's wide partnerships, and now the ability to put a future Google-powered device on the Verizon network, as diluting any economic incentive for Google to be a substantial spectrum auction competitor," Barden said in a note to clients.
Verizon Wireless said it sees the move as another option for customers, rather than a change to its business model. While the company said it would be accountable for network quality, customers would need to take any questions about software from unaffiliated suppliers to those suppliers.
The wireless carrier said devices would be tested and approved in a laboratory which received additional investment of $US20 million this year in anticipation of increasing demand.
Fletcher Cook, a spokesman for AT&T, did not say whether the No. 1 US mobile service would follow suit. He said the company already has a robust line-up of devices and software.
- REUTERS
