FCC wireless ruling may kill smartphone deals, create app partnerships

Jessica Scarpati
16 Sep 2009
00:00

Operators must innovate, use customer-information advantage

European regulators have already mandated that exclusivity agreements between carriers and manufacturers must be temporary, according to Mike Sapien, a principal analyst at Ovum. Whether by regulation or market demand, clipped exclusivity deals are likely soon to become a given in the U.S., he said.

"I think the industry is reacting and saying these exclusivity agreements would only have a six-month life," Sapien said. The light scrutiny of looking at the issue and possible intervention has already resulted in the idea that the industry has to come around.

"I think it's going to be more about becoming an innovation factory than a singular technology or service," Sapien said. "They just need to hit it hard."

Hitting application development and innovation hard is its own challenge. The key will be marrying customer information with apps that focus on customer mobility, especially using GPS, Jude said. An app that helps customers finds airline tickets, hotel rooms and other accommodations based on an itinerary would be valuable to traveling executives, he added.

"Situation-sensitive applications – it could be based upon your lifestyle, your location or what it is you're planning to do," he said. "Some of those things could be combining location with e-commerce."

Larger telecoms can no longer operate under "the 'build it and they will come' mentality," Jude said.
Traditionally, wireless carriers have been less focused on services and more focused on simple access, but that really has to change, Jude said. "The FCC is going to do something – whether it's exclusivity or net neutrality on the wireless space. I think it will do something. My recommendation to carriers is just to expect it."

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