A recent patent called “Dynamic Carrier selection” filed on Oct.10 2006 details how Apple may use “mobile virtual network operator” (MVNO) to become a cell phone carrier directly from iTunes.

According to unwiredview.com,

When iPhone first connects to wireless network, it sends iTunes MVNO server it’s ID and location, and get’s back the information with the available networks, services and rates in the area. Then a user can manually select the best network for him, or the network operator can be dynamically selected by software according to specified criteria.

Once the permanent connection is established, the available network service and pricing data can be continuously updated, and the device can be set to change the network operator as better offers become available. E.g. the AT&T may have better daytime rates, while T-Mobile is offering better night time and weekend minutes, or Vodafone may have the excellent voice call prices while 3 Network has even better data rates. Your iPhone knows this and switches the network operator accordingly.

All the bills from network operators go to the Apple/iTunes MVNO and you are billed via iTunes as well.

But that’s not the end of it. Apple is also thinking of allowing networks to dynamically submit bids with their various service offerings and prices in different areas.

Customers can dynamically choose the best service vs. cost solely at any given time of the day. The customers are no longer tied down by the two year contract from carriers.

Source: Link