Sprint-Nextel Corp., the U.S.’s third-largest mobile phone company, signaled it must take a more hands-off approach to keep pace with innovation at MobileBeat’s second panel today.
“We need to let go of demanding permission,” said Russ McGuire, Sprint’s vice president of strategy. “You don’t want to move at carrier speed. You want to move at Valley speed.”
They are unusual words for a wireless carrier, underscoring Sprint’s recognition that it can’t control the consumer experience from end to end if it wants to compete against Apple and AT&T’s iPhone partnership and its explosive app store growth.
Sprint-Nextel partnered with Palm Inc. to launch the Pre smartphone last month in an effort to take back market share from AT&T Inc. The company posted first-quarter earnings of 3 cents a share on the back of job cuts beating analysts estimates’ of a 5 cent loss per share.
“It’s a fundamental change in our nature, but we need to keep pushing that and riding that and not be an impediment to the growth of the industry,” McGuire said.
Pandora chief technology officer Tom Conrad said some wireless carriers are still grappling with the question of whether to think of themselves as media companies or as more of a utility.
“Will carriers become pipes or will they continue to be media companies?” he said. “They’re realizing it’s not the worst end game if they are disintermediated of their desire to become giant media companies and instead become the best wireless backbone,” he said.
Vodafone’s Peter Barry, who is head of its venture capital and start-ups group, said the loss of control would lead to problems with security.
“The biggest fear of permission-lessness was that if we allowed anything on the phone, we would be in the same situation as the PC business,” he said.
Conrad said retaining some control points may be ideal. He pointed to the success of the iPhone, saying the phone really “came into its own only when Apple moved to the more traditional revenue model” of subsidizing the initial purchase price through a long-term service agreement.