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Carriers must develop new business model: Sprint exec

BOSTON -- Carriers must adjust their business model and embrace openness to encourage innovation in order to fuel the Internet-enabled mobility revolution, according to a Sprint executive.

In his address "Mobile Freedom Now" at Mobile Internet World in Boston, the Sprint executive said that the Internet is pushing mobility to a tipping point. For mobility to parallel the PC Internet's growth, however, the mobile Internet experience needs to be instant, compelling and worry-free, he said.

"Carriers at the central point of either enabling this mobility revolution or holding it back," said Russ McGuire, vice president of corporate strategy for Sprint, Overland Park, KS. "There are fundamental changes that have to happen to fully unleash the power of mobility revolution."

Mr. McGuire compared the current state of the mobile industry to the state of the PC Internet in 1995, which saw the launch of giants such as and eBay.

"In 1995 we realized that the Internet was something we needed to be a part of, and we are at the point that the Internet was in December '95 in the mobility revolution," Mr. McGuire said. "Email, voice and texting are universal, but we haven't figured out how mobility fundamentally changes the way we interact with the world, both business and personal.

"We're at the point where it's starting to change rapidly," he said.

In order to make the mobility experience instant, there are fundamental infrastructure needs and more investments on the part of the carriers are necessary, according to Mr. McGuire.

He said that Sprint is working towards this vision, citing the carrier's deal with Clearwire and the recent launch of the XOHM WiMAX 4G network in Baltimore, sub-second push-to-talk and femtocell technology as evidence.

"The XOHM WiMAX 4G network, which will be integrated into Clearwire, was launched in Baltimore a few weeks ago, and it will be in Boston before long," Mr. McGuire said. "It's not just a faster network, it isn't an upgrade, it's an entirely new business model.

"We have expectations about how we build and operate mobile networks and where our profits come from, but there are cracks in dam of carriers' existing business model," he said. "We asked ourselves, 'If we could start from scratch, how would we do it?' and we've made a big investment to make the mobile Internet more instant and we've placed a huge bet on openness."

Sprint's Airave femtocell technology plugs into a broadband connection to provide 5,000 square feet of Internet connectivity.

"You go from questionable coverage to perfect coverage," Mr. McGuire said. "All of a sudden you start doing things on your mobile device that you previously couldn't imagine."

One of his main points was that mobility has to be compelling for the consumer, and that a hands-off approach from the carriers, enabling the innovation of mobile applications, may best serve this goal.

"Consumers must say 'This is something that I love to do, this is something that I want to do,' and it's not necessarily the carriers who will make that happen," Mr. McGuire said. "We have to be open for business, open for developers to create all the great stuff -- tens of thousands of mobile applications -- we can't even imagine.

"We have to make it easier for application developers to launch new applications on our network," he said. "On December 8th we'll host our annual mobile application developers conference, and we want to make it so that, instead of having to rewrite 70 to 80 percent of the apps for each device, they'll only have to rewrite 5 percent."

In addition to openness of application development, he also stressed that openness is important as far as mobile devices.

"We have over 200 devices certified on our network, and openness is essential because we as carriers can't guess what developers and customers need," Mr. McGuire said. "We as carriers aren't the easiest to deal with, and we need to be open for business to truly revolutionize mobility."

Lastly, Mr. McGuire said that carriers need to provide a worry-free mobile Internet experience so that consumers aren't held back from surfing by their anxiety about their phone bill.

"One of the biggest things holding people back is the fear of the mobile bill," Mr. McGuire said. "If I go to this Web site, if I send this text message, what will this mean for my bill every month?"

He touted Sprint's $99.99 Simply Everything all-inclusive voice and data plan as an example of an offering that sets consumers' minds at ease, thus leading to broad acceptance and adoption of the mobile Internet.

It's also important to drive consumers' awareness of their handset's advanced features.

Sprint's ReadyNow educates consumers about the capabilities they don't know how to use. Sprint employees spend an average of 30 minutes after consumers buy a handset to introduce them to the features of phone.

"Education will drive increased use of those capabilities people couldn't dream they could do on their mobile phone," Mr. McGuire said.

While rivals such as Apple's iPhone and the T-Mobile G1 with Google have found success with the high-end smartphone model, Mr. McGuire said that Sprint is focused on facilitating mobile Internet access from affordable feature phones for the mass market.

"One-click Internet access is available on our feature phones, driving the value of content below expensive smartphones into the hands of everyday Americans," Mr. McGuire said. "I don't thing smartphones are going to be the answer for everyone ever.

"Do they need it in a device that's as fancy as iPhone or Google phone?" he said. "There are different apps and different answers that apply to different users, and we're putting the Internet in the hands of everyone."

He said that the mobile Internet is rich, and that while some applications are perfectly suited to desktop, some apps are only relevant to mobile.

"Up until now, the mobile browser has been a poor cousin of the PC Internet, due to user interface and screen size limitation, but that's starting to change," he said. "The power of mobility that takes advantage of context and the personal nature of the mobile device creates new power."