Week 8

What if you could buy your iPhone and wireless service directly from Apple, without having to sign a contract with AT&T or Verizon? Imagine going to Google.com and buying an Android phone that comes with Google Wireless.

That day may come sooner than you think.

LightSquared, a wholesale 4G carrier, recently announced that it has five partners lined up, including a website, a national retailer, a device manufacturer, and two carriers. LightSquared's LTE mobile broadband network will provide the infrastructure and service, and partner companies will slap their branding on it and sell it as their own wireless service. The network is set to start rolling out later this year.
The company didn't name its partners, but speculation has run rampant. Is Amazon Wireless coming down the pike? Motorola Wireless? Target  Wireless?
Whoever the partners turn out to be, LightSquared has the potential to shake up the current wireless service market. In the near future, you could buy a smartphone with service directly from the phone's manufacturer or the store that sold it to you.
That wholesale model promises some big benefits. For consumers, it means you would no longer have to covet a device that exists on a network that you don't want to switch to. For retailers, it's a way to have a recurring relationship with consumers and make a few extra bucks by selling an additional service.
Who loses? Existing carriers. Wireless service could easily become a commodity: Just like you don't know whose bananas you're buying at the grocery store, one day you may not know who is providing your cell service.
There are wide-ranging implications of that, including the titillating potential for your cell phone to automatically choose the cheapest service available every time you made a call. Wouldn't that be something?
But don't feel too bad for the wireless carriers -- their business model is being shaken up no matter what happens. The huge spike in mobile data means networks are spending $50 billion annually just to keep up. Smaller wireless companies like Sprint , T-Mobile and MetroPCS  are starting to ask themselves whether all that spending is worth it.
"If you're not AT&T or Verizon, you're wondering if you can afford to build out a nationwide network and compete with the leaders anymore," said Dan Hays, a partner at consultancy PRTM who focuses on telecom issues. "Simply being a network owner may no longer be enough to sustain you."
In other words, the sea change is already underway.


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