By Monica Alleven
Verizon Wireless will, effective immediately, limit any handset exclusivity deals to six months so that smaller wireless carriers can get devices sooner.
Last February, a group of 24 small wireless providers asked Verizon to eliminate long-term exclusive handset agreements with LG and Samsung, and the carrier agreed to do that. But today’s step, outlined in a letter to lawmakers by Verizon Wireless CEO Lowell McAdam, goes a step further to include all manufacturers and all devices.
For the purposes of this deal, Verizon defines small wireless carriers as those with 500,000 customers or less.
McAdam noted that Verizon puts itself at risk when it procures exclusive handsets from its vendors that consist of hundreds of thousands or even millions of each device. If the device isn’t popular in the market, Verizon ends up with excess inventory and potential competitive losses. If a device does well, “six months is a reasonable time for us to earn the benefit of our risk and investment,” he said.
The letter goes on to say that Verizon doesn’t have a problem with small 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 carrier said.