The wireless industry opens up We must be concerned with open mobile applications and open mobile devices in the industry and how they will affect prepaid. As you move forward with your prepaid business, be aware of how changing technologies will impact you.

The Open Handset Alliance (OHA)

OHA, a multinational alliance of technology and mobile industry leaders, collaborated with a group of technology and wireless companies to develop Android, an open, comprehensive platform for mobile devices.
According to OHA, their goal is to foster innovation through Android. OHA stepped forward after realizing developers, wireless operators and handset manufacturers did not have the ability to quickly respond to the changing needs of mobile consumers.
Android is a “fully integrated mobile ‘software stack’ that consists of an operating system, middleware, user-friendly interface and applications.” Through this platform, developers, wireless operators and handset manufacturers will be able to bring to market “innovative new products” more quickly and at a much lower cost.
As of press time we were not aware of any instance in which this software was running on mobile devices.

The wireless players

Soon after OHA emerged, Verizon launched their “Any Apps, Any Device” campaign. There may not be a relationship between these two moves, but one can assume OHA got other carriers thinking.
Under the rules of the Verizon program, customers have the option to use wireless devices, software and applications not offered by Verizon wireless on their network. The technicalities of the new program will be released sometime this quarter (Q1).

“In essence, [there is the] walled garden [effect] where you have to go to your service provider for every application, and the carrier is in the business of monetizing applications as opposed to network capabilities,” says Mike Manzo, CMO of Openet, a provider of transactional intelligence solutions. “Finally, the wireless service providers appear to be acknowledging that they are a pipe, as opposed to an application, and they are going to monetize their network capability, which is what they do well. They’re probably going to be layering on smarter network capabilities, things like quality of service or bandwidth boost capabilities or any number of things that improve the user experience.”
According to a Verizon representative, the company made their move to give customers a second option to connect to the Verizon network and developers a chance to innovate.

Prepaid steps in

As the technology develops, there will be an influx of new, ready-to-use mobile devices for many networks, which include MVNOs. Will prepaid providers welcome unlocked devices? Will their handset technology be compatible with outside software developed by platforms such as Android? It is up to the prepaid wireless dealers and MVNOs. We can’t see them standing still while the major carriers (mobile network operators - MNOs) move forward.

Once open device programs pick up momentum, we speculate both post paid and prepaid carriers will have to further rely on cost-per-minute as their main selling point instead of the handsets. Although in the post paid world mobile devices are so often used as bargaining chips to entice consumers, prepaid wireless decisions are more often than not based on cost-per-minute.

Open device/application programs won’t pop up overnight; they will take months and perhaps years to develop. We think this will give MVNOs and prepaid providers plenty of time to figure out where they stand.