Wednesday, November 28, 2007

Cell Phone unbundling

Verizon has announced that it will unbundle its phone service. When this goes through customers can buy an unlocked cellphone and buy the service separately much like how it is in India and other parts of the world. This is great news for the markets and consumers. Makes more competition possible and I am pretty confident will bring prices down. I always believed that cell phone companies here charge a lot more for plans in part to cover the cost of all the free phones they give away. That is why customers are locked into a two year contract. If customers can choose to buy cell phones independent of service then they will have a wider choice in carriers and will be able to switch companies if they are dissatisfied with the service. The only problem I forsee is that Verizon works on CDMA technology while several other carriers use GSM. That would limit carrier switching to some extent. In any case, this is a great move towards more competition in the cell phone markets.

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