If smartphones are to be a requirement for participation in civil society, privacy- and freedom-preserving smartphones are needed at the very least. People shouldn't be required to submit to some company's Terms of Service in order to participate in society.
Meaningful regulation would mean e.g. air-gapped infrastructure so they can't make inadvertent privacy mistakes. And guaranteed service levels, and a service of last resort.
Google have based built a business model without accountability and transparency. Which is fine, as long as we're not forced to use them by the state.
Telcos are licensed. Mobile phone manufacturers and, crucially, OS providers, are not. Although in the EU they are now subject to some Digital Markets Act control.
And telco licensing isn't even really relevant. Afaik, licensing condition only has to do with their use of the airwaves and other such technical stuff. It's got nothing to do with ensuring the rights of the telco users.
> Should everyone be required to use private banks to access e.g. foreign exchange?
Maybe so, I don't know. Though it is worth remarking that "private" banks in the US really are only semi-private. The (admittedly imperfect) regulations that banks are subject to starts to blur the lines between public and private. Not to mention that there are far more banks than smartphone handset-and-OS makers.
> No modern society is going to maintain a parallel government economy to serve the vanishingly small minority who live in fear of private companies.
This is not the only option (though it would potentially be an option for some sufficiently-powerful societies). Other options could include:
1. Multilateral coalitions to do some combination of specify/design/build smartphones and/or their OS
2. Specify a set of user rights and regulate smartphone handset and OS manufacturers accordingly
As a sibling commenter said, this isn't about living in fear of private companies as such. It's about not wanting to be coerced into a system of products that don't preserve liberal rights.