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Could Google Phone Mark End of Network Domination

by Ron Miller on Dec 14th, 2009, 10:08 am
News "leaked" this weekend of an unlocked Google-branded phone. On the upside, an unlocked phone means you aren't tied to any particular carrier, nor are you required to sign a contract, but on the downside, you don't get the large provider subsidy on the phone cost in exchange for the contract lock-in. I'm wondering if Google releases a really nice unlocked phone for a reasonable price, if it could mark the beginning of the end of large network domination in the U.S.

The Rest of The World Doesn't Operate this Way

If you go to Europe, you'll find network stores similar to AT&T and Verizon, but you are hardly limited to these options as you are for the most part in the US. Instead, you can walk into just about any department store and find a variety of unlocked phones available for sale without restriction. There are plenty of reasonably-priced choices and when you walk out, you can go to one of the many kiosks that sell SIM cards, plug it into the phone and you're good to go. No contract, no hassles, no problem.

We Aren't Trained this Way

In the US we are trained to go to the phone store (or consumer electronics store of choice) and pick out a phone. We find the one we want. We sign a contract and the cheaper the phone, usually the greater the commitment. For instance, Radio Shack has a displayed price for AT&T phones, but a closer look reveals that the cheapest price requires that you renew your 2-year contract *and* add on at least one $9.99 or more feature to your bill. AT&T is still trying to get you to buy extra services and who can blame them? That's how they make a living.

Why Shouldn't The US Operate in an Open Market?

Why shouldn't we operate in an open cell phone service market in the US too. Sacha Segan writes in PC Magazine that the US market is complicated by a variety of infrastructure choices:

Quote ...
The U.S. uses two incompatible radio standards on three different spectrum bands. It's possible to build a GSM phone that supports T-Mobile and AT&T, sure. But folks who want Sprint and Verizon will still be out in the cold, because the network-based controls on those carriers can actually lock out unapproved phones.
I wish I knew more about the network end of things, but I'm not clear that Europe and the rest of the world operate on a single infrastructure style, and they seem to manage to work around this. What's more it seems to me, that they could release a variety of phones over time to accommodate these differences. Vendors would buy time from the various networks and sell SIM Cards based on network requirements. These companies could compete on price and service.

I think we can all agree, that for the most part, people are fed up with the major providers and are looking for alternatives. Could a phone with the clout of Google behind it, that provides a way to be free of these hated entities lead the way to a full-scale change in the way we purchase cell phone coverage in the US? There are too many unknown variables at this point, including cost and features on this phone, but if this comes to pass, we could remember this as a seminal moment in time, when the cell phone business in the US changed forever.
News Story Tags: cell_phones, google, google_phone
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Dec 14th, 2009
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Re: Could Google Phone Mark End of Network Domination

Sorry but how exactly does an unlocked phone reduce the influence of the providers? they still own the 'pipe' and pay as you go is certainly not the cheap option. You can get a basic data plan but it's insultingly small and they penny anti you for all the other stuff just the same.
There is just no competition between the network providers anywhere.
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calico is offline Offline
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Dec 14th, 2009
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Re: Could Google Phone Mark End of Network Domination

Hi Calico:
I'm thinking you will be able to buy disposable 30-day SIM cards from kiosks you'll find all over the place. They are very common in Europe. The SIM cards may come from the networks themselves, but my guess is that the networks will sell pools of bandwidth to different providers who will market their own cards. I expect the networks will also have to open their pipes to alternatives, just as the land lines have been forced to do. So one way or another, I think there will some sharing going on.
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Techwriter10 is offline Offline
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Dec 14th, 2009
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Re: Could Google Phone Mark End of Network Domination

Question please: How does one identify one's own phone number when using a 30-day SIMM card? How is that managed and controlled? Thanks very much.
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dmclark is offline Offline
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Dec 15th, 2009
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Re: Could Google Phone Mark End of Network Domination

>> how does one identify one's own phone number when using a 30-day SIMM card?

The SIM cards embed the phone number if I may say. If you buy a SIM card in the kiosk, it's deactivated by default. The IN (Intelligent Network) recognizes when a given SIM card goes online for the first time (needs the PIN to be entered) and activates the account (prepaid generally) etc. The IN then allocates a phone number that you check generally via a specific call number.

>> How is that managed and controlled?

The IN manages everything. INs are big server or server farms that, to my knowledge, manage the number, the accounts, their credits, etc. I don't believe postpaid numbers can be used that way since they need more personal data to be entered (for the prepaid SIM cards, it's looser depending on countries, but you have to prove at least your id, and it will be submitted later by the kiosk to the phone operator that will keep it in the IN system as well).
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Abdelaziz is offline Offline
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Dec 15th, 2009
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Re: Could Google Phone Mark End of Network Domination

Some comments from Europe (Netherlands):

1. No, mobile network providers don't *have* to open their pipes to others because there are enough compatitors (which is not the case with landlines, the 'last mile' to the homes).

2. Mobile network providers *do* sell airtime to others, so called MVNO's (Mobile Virtual Network Operators). But the providers also sell their own contracts.

3. Here you can buy a cheap phone in combination with a 1 or 2 year contract. Indeed you can buy an unlocked phone and then buy a prepaid SIM card or have a SIM-only contract. The latter is a post paid contract without phone; of course much cheaper than one with phone so you can calculate what your phone *really* costs. Stange enough people keep thinking they really get their phone cheap or for free. Don't know why...

4. A new prepaid SIM card will have a new number. At kiosks, shops, supermakets, etc. you can buy extra time. You get a form with a long (12 digit?) number. With your phone (with the prepaid SIM card) you call a free number and enter this long number. After that your balance is topped up again.

5. And in case your phone is still OK after a 1 or 2 year contract, you can sign a new contract with the same provider. But if you wish you can go to another provider and keep your number, porting it to the new provider. They have to cooperate with this by law and they do this really smoothly nowadays.

6. In Europe we only have two types of network: GSM and UMTS. Most modern phones work on both and most operators explore both. Since UMTS (= the newer one) doesn't have as much coverage as GSM, phones switch between the two types automatically. So whatever phone you have here, it will work throughout Europe (or will not work anywhere).

Hope this helps you guys a bit in your discussions and hope you will have open mobile networks soon like here in Europe.

Philippe Chabot
Last edited by Philippe Chabot; Dec 15th, 2009 at 5:02 am.
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Philippe Chabot is offline Offline
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Dec 15th, 2009
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Re: Could Google Phone Mark End of Network Domination

Thanks for all the great information on this. These are fantastic comments and certainly are helping me fill in some of my information gaps about how all of this works.

Regards,
Ron
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Techwriter10 is offline Offline
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Dec 15th, 2009
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Re: Could Google Phone Mark End of Network Domination

Need more info about this subject? Let me know. I'm a telecom professional (consultant & project manager) here.

Philippe
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Philippe Chabot is offline Offline
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Dec 15th, 2009
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Re: Could Google Phone Mark End of Network Domination

Thanks, Philippe. Maybe we can do a Q&A sometime on differences between US and Europe cell phone systems.

Ron
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Techwriter10 is offline Offline
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Re: Could Google Phone Mark End of Network Domination

Perfect idea. See your Inbox at Daniweb for contact info.

Philippe
Last edited by Philippe Chabot; Dec 15th, 2009 at 8:37 am. Reason: deletion
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Philippe Chabot is offline Offline
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