International Disconnect

Long-fragmented U.S. wireless networks have created a chasm in the global business network.

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Still, in North America, mobile operators more tightly control how subscribers use their networks. They often turn off phone features that might be used to circumvent the use of cellular minutes. Each carrier also has terms and conditions regarding the type of traffic it will permit on its 3G data networks.

The closed-network approach of U.S. operators is commonly referred to as the "walled garden" problem, because users are restricted to the confines of their operators' networks.

For example, a brouhaha erupted in April when AT&T/Cingular and Sprint Nextel began blocking voice phone calls to free conference call numbers in rural areas that carry high call- completion fees that the cellular carriers must pay. Some subscribers have terminated their contracts, claiming that there was no mention in their terms and conditions of the carrier being able to selectively block phone calls to legitimate public telephone numbers. Meanwhile, AT&T/Cingular has gone so far as to sue a series of small independent telecommunications firms.

"There is definitely more of a Net neutrality type of mobile mind-set in Europe than there is in the U.S.," says Cliff Raskind, another Strategy Analytics analyst. "U.S. workers pay about $70 per month for 'unlimited' data usage, for example, but there are a number of things they can't do with the devices," which are supplied and subsidized by their carriers.

Device (In)Flexibility

Some U.S. operators, for instance, block Bluetooth access connections to PCs and printers. Most also prohibit certain types of traffic, such as voice-over-IP (VoIP) and multiuser traffic aggregated by cellular routers, from running on their 3G data networks.

"I think a fair assessment would be that U.S. consumers are faced with a competitive choice of walled gardens," says Michael Voellinger, an enterprise mobility consultant at Telwares Communications LLC in Pleasanton, Calif. The closed networks prevent subscribers from using features that would compete for cellular airtime minutes.

For example, the E61 that Nokia offers in Europe is a dual-mode cellular/Wi-Fi device. However, its U.S. counterpart, the E62, is missing the Wi-Fi link. Like Bluetooth and VoIP, Wi-Fi is a potential alternative to cellular usage, Voellinger notes.

"I'm willing to pay full freight to purchase unsubsidized, unlocked phones so my users can go anywhere. But my carrier won't let me," says Art King, the global network architect of a leading worldwide consumer products company that he asked not be named. Unsubsidized phones cost about $600 to $1,000 depending on the model, according to Strategy Analytics.

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