Verizon to open cell network to all phones
No. 2 U.S. wireless operator says it will allow customers to use any device, not just the phones it offers.
NEW YORK (CNNMoney.com) -- Verizon Wireless will break with the rest of the U.S. cell phone industry and become the first mobile operator to let customers use any phone on its network, the company announced Tuesday.
The No. 2 U.S. wireless operator said that, by the end of 2008, its customers could use phones and other devices that they've purchased anywhere, as long as they meet certain standards.
It is a major change for Verizon Wireless, which had previously only sold phones and service together as a package. U.S. cell phone carriers dictate the type of phones customers may use.
"This really represents a 180-degree turnaround from where Verizon was before," said Harold Feld, senior vice president of the Media Access Project, a public interest group. "Until about a year ago, the model for the wireless industry was, 'We own the network, we control what's on the network.' Verizon, like the other carriers, was very aggressive about controlling the look and feel of its products."
Feld said that Verizon was likely prodded by the emergence of Google (Charts, Fortune 500) as an open platform player (working together with Sprint (Charts, Fortune 500) and T-Mobile) and the recent public dissatisfaction with the locking of the iPhone.
"Verizon was very quick on the uptake, turning around and realizing these changes weren't challenges to their business model but opportunities," he added.
Phones and devices that access Verizon Wireless' network will still have to meet technical standards dictated by Verizon - and the company said it would publish guidelines for designing software and devices for the network early in 2008.
It is expected that Verizon and Google will be the two main bidders to have operating rights for a piece of the high-speed wireless spectrum called the C Block.
If Verizon posted the highest bid and took over the spectrum, it could offer wireless Internet access across the country at speeds comparable to DSL and cable, said Feld.
Federal stipulations require that the winning bidder be open to all devices and applications, he said, so Verizon's move Tuesday makes them ready for a potential network expansion.
Verizon was not available for comment.
Verizon Wireless is a joint venture of Verizon Communications and Britain's Vodafone PLC.
Shares of Verizon Communications (Charts, Fortune 500) climbed 0.6 percent on the New York Stock Exchange Tuesday afternoon, while U.S. shares of Vodafone (Charts) were little changed. Rival Sprint Nextel (Charts, Fortune 500) was down 2.5 percent, while AT&T (Charts, Fortune 500) was 1.3 percent higher.