Research and Markets: Handset Subsidies – Legacy Overhead or Marketing Essential?
DUBLIN–(BUSINESS WIRE)– Research and Markets (http://www.researchandmarkets.com/research/b43474/handset_subsidies) has announced the addition of the “Handset Subsidies – Legacy Overhead or Marketing Essential?” report to their offering.
There is an ongoing and fierce debate as to whether handset demand is driven by handsets and the attractiveness of the features within them, or operator subsidies and length of contract. It is a complex relationship with many variables playing a part. Handset subsidies are perceived to have a negative impact on profits and EBITDA and encourage churn. As a result, MNOs increasingly want to operate in markets without subsidies and many regulators around the world want markets that are more transparent for consumers. Subsidies are not just a cost to operators though. They also provide the network operator with a much higher degree of control in the market and lead directly to higher revenue levels, which more than offset the costs incurred. Loss of revenues and market control can lead to market stagnation, as customers fail to upgrade their handsets and consequently fail to begin using the new data services that operators are depending on to achieve areas of growth, while voice prices continue to erode due to both regulatory and competition effects.
Are subsidies a bad thing, or an essential element in MNOs’ armouries, enabling them to develop the market and new services effectively for the eventual benefit of the consumer? Subsidies definitely reduce transparency, but is more transparency in the best interest of the MNO or the consumer? Can they be removed in any event or will they inevitably re-appear in another form if regulated out of the market?
This report looks at the case for and against subsidies, examines some markets where subsidies have recently been implemented and those where subsidies are being reduced and also looks at the impact that subsidies, and the lack of them, have had on the introduction of new handsets, such as the iPhone. Conclusions are drawn about the efficacy and relevance of subsidies and recommendations made for MNOs facing the question of whether to continue with or to remove this mechanism.
Key Topics Covered:
1 Overview
2 Introduction
3 Market Context
4 Limiting Subsidies
5 Subsidy Removal Consequences
6 Country Profiles
7 Conclusions
8 Recommendations For MNOs
For more information visit http://www.researchandmarkets.com/research/b43474/handset_subsidies