Stories about disatisfaction with cellular carriers continue to surface in the mainstream media and blogs alike. This morning's NY Times speaks of a cellphone straitjacket that is inspiring a rebellion. Primarily about Google's entrance into the market with the Open Handset initiative, the author posits a clash of titans — Silicon Valley versus the mobile industry. Silicon Valley's VC community seems only too willing to play along, as the times discovered when interviewing Khosla's David Weiden:
“Definitely there is hostility,” said David Weiden, a partner at Khosla Ventures in Menlo Park who has previously worked at McCaw Cellular, Netscape and AOL. “There are enough catalysts for change now, and it is already happening.”
But the question many are asking is why the tension now, in contrast to, say, six months ago? The catalysts are threefold, said Mr. Weiden: the proliferation of new technologically advanced mobile phones, greater bandwidth and increased competition. But mainstream consumers too are being conditioned to expect more, particularly after the debut of the iPhone which offers easy-to-use Web browsing, Wi-Fi capabilities and high-quality video.
Closer to home, Brightspark Ventures' Tony Davis (returning to the blogging world after a seven month hiatus) expresses doubt that all of this activity will yield results. He notes that the handset industry is still fragmented, and that the carriers still control the agenda. Certainly that's true in Canada, and to a lesser degree in the US.
And speaking of Canada, this weekend we entertained a friend who works for one of the larger mobile providers in this country. Over breakfast we chatted a bit about the mobile industry in Canada. One of the observations proffered was that mobile in this country is different. Spread out over long distances, it's more expensive to build out the nationwide network coverage that would be required to provide unlimited high speed data, for instance. Canadians should expect to pay more because the telcos have to build a similar size network to the US in order to serve a population that's 10% the size.
Maybe. Or maybe Rogers' rumoured March iPhone launch will be the first fissure in the rational pricing model that has served our telecom oligarchs the fat profits they have enjoyed for such a long time.