* Hesse describes Sprint today as 'somewhat open'
During his keynote address at the Open Mobile Summit in San Francisco earlier this week, Sprint CEO Dan Hesse talked a bit about there being a continuum of “openness” in the mobile world and the quandary it brings.
During his keynote address at the Open Mobile Summit in San Francisco earlier this week, Sprint CEO Dan Hesse talked a bit about there being a continuum of “openness” in the mobile world and the quandary it brings.
The mobile landscape ranges from “closed” mobile ecosystems to “anything goes,” according to Hesse. He characterized most carriers as being at the “somewhat open” stage, with Sprint a bit further along than that today but still with a ways to go toward greater openness.
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Being at either end of the continuum has its pluses and minuses, he said, citing the tradeoff between controlling, and thus protecting, the user experience and giving customers more choice.
He acknowledged that the most closed system is “the Apple experience,” but added that Apple is also able to improve customers’ satisfaction with its centralized quality-control approach that contributes to consistency in user experiences.At the other end of the range, “The beauty…is that you have so much choice,” Hesse noted.
Choice may be good for users, but much of the talk at Open Mobile Summit revolved around the difficulty in streamlining mobile application developers’ efforts across today’s myriad mobile OS platforms. The implication was that developing once, even within the “open” Android-only platform, is challenging, because Android is growing fragmented.
Hesse gave a nod to the growing share of smart mobile devices, reporting that about 60% of the devices Sprint sold in the third quarter of this year were smartphones. There’s good and bad news in that, he said.
Subsidies and costs associated with the network and marketing are higher but the trend could also lead to lower churn and higher average revenue per user, he said.
“A typical smartphone costs the carrier $600 or more, but is sold to the user at $200 or less,” Hesse says, implying that this was a problem needing solving.
However, carrier subsidy investments are currently protected. Users pay steep early termination fees (ETFs) if they break their contracts early.
FCC Chairman Julius Genachowski recently called ETFs “a consumer headache,” but defended them as necessary to keep carriers from “taking a bath” if users should switch operators soon after getting their phones.
Critics argue, though, that while ETFs may be a necessary evil, with a wide range of device prices, it doesn’t make a lot of sense for carriers to impose the same ETF regardless of device.
