Verizon Wireless took one of the most aggressive steps in the mobile industry Tuesday by saying it will open up its network to provide more choices to consumers.
The company, which has the second most subscribers in the U.S. behind AT&T, said that by the end of next year consumers will be able to use any device or application compatible with its wireless network.
The announcement revolves around the concept of "open access," loosely defined as giving consumers the option of buying devices from companies other than the wireless carrier, as well as using applications the carrier has not selected.
It more closely mirrors the computer industry, which allows users to buy any machine and still connect to the Internet.
It contrasts sharply with how operators conduct business today. Typically, Verizon Wireless and other carriers sell the phones that work on their networks directly to the consumer and play a role in approving which applications subscribers can use.
The carriers usually subsidize the cost of the phone to the customer in exchange for longer-term service plans.
Verizon Wireless said Tuesday that it will continue to offer the "full service" model, where it provides customer support for phones purchased in its own and affiliated retail stores, but it will now also offer a "bring-your-own" option.
In that scenario, customers can buy Verizon Wireless service for handsets from other vendors. The customers can also use other applications, though Verizon Wireless will not offer customer support for those applications or for phones bought elsewhere.
"We've been looking at this for a very long time, and we've seen the accelerating pace of innovation and the expanding needs of customers that demand different business models," Lowell McAdam, Verizon Wireless's president and chief executive, said during a conference call. "This makes good sense at our time in our evolution."
The announcement falls in line with trends across the broader industry.
Earlier this month, Google announced formation of the Open Handset Alliance to promote a new mobile-phone operating system called Android.
The system uses open-source software, making it free and open to third-party developers. Sprint Nextel and T-Mobile USA have joined the alliance, and handsets are expected to launch by the end of next year.
Google has also been working with federal regulators to mandate open access with the next swath of mobile airwaves to be auctioned off early next year.
Scott Rockfeld, group product manager with Microsoft's Windows Mobile operating system, applauded Verizon Wireless' announcement.
"We are in absolute support and excited they are doing it," he said. "When we see an announcement like this that is tremendously bold, it is pushing the market forward."
He said Microsoft is not likely to join rival Google's alliance anytime soon.
Still, even with open-access networks, there will be some limitations. At the minimum, devices that run on the Verizon Wireless network will need to use the underlying cellular technology — CDMA. That technology is shared by Sprint Nextel in the U.S. but differs from GSM, used by T-Mobile USA and AT&T.
Verizon Wireless also said handsets that use its network will have to be certified in a laboratory. The company said it spent $20 million upgrading its lab to support increased demand. It plans to publish technical standards early next year. Mobile operators will also have to figure out how consumers will pay for network access.
Early indications by Sprint Nextel, which is launching a wireless open-access network early next year using a technology called WiMax, hint that it will be flexible and allow consumers to pay by day, month or year.
Also, it remains to be seen how customers will react to buying phones and other devices at full price in return for the freedom of buying any handset and using any application.
Developers could also be slow to jump on the bandwagon. They say without a large user base, it's not worth their time to tailor a product for the growing list of accessible networks or operating systems.
Lowell said this is a long-term bet for Verizon Wireless that will span beyond phones to consumer electronics and household appliances.
"We see lots of devices," he said. "We are ready to accelerate that piece, the market is there, and we want to tap into it."
Tricia Duryee: 206-464-3283 or email@example.com