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Jul. 19, 2009

Effective today, Verizon Wireless said it would limit any handset exclusivity deals to just 6 months so that smaller mobile service carriers can get devices a lot faster.

This had been expected by many for quite some time now.

About five months ago, a group of 24 small wireless providers asked Verizon to eliminate long-term exclusive handset agreements with LG and Samsung, and Verizon agreed to that.

However, outlined in a letter to lawmakers by Verizon Wireless CEO Lowell McAdam, today's decision goes a step further to include all manufacturers and all wireless devices as well.

McAdam also noted that Verizon is now placing itself at risk when it procures exclusive handsets from its vendors that consist of hundreds of thousands or even millions of each device.

For any reason, if the device isn’t popular in the market, Verizon ends up with a huge inventory and potential competitive losses.

On the other hand, if a device does sell easily and is very popular, “six months is a reasonable time for us to earn the benefit of our risk and investment,” he said.

Verizon actually defines small wireless carriers as those with 500,000 customers or less.

The letter also suggests that Verizon doesn’t have a problem with small wireless carriers having access to any manufacturer’s portfolio of prototypes and products in development, so long as it isn’t revealed which ones have been selected by Verizon.

Obviously, pre-launch product selections are proprietary and must remain confidential between Verizon and its vendors, the wireless carrier said.

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    This article was featured on Business 5.0 and on Tech Blog.

Source: Verizon Wireless.