I always see The Netherlands – my home country – as a small, easily graspable version of other, larger and more important western countries and even the west as a whole. In light of this, Tweakers.net’s Arnoud Wokke points to a very interesting report about the Dutch telecommunications market. This reports notes a trend that, if present in the rest of the world, could have serious effects for phone makers.
In many countries, when you buy a smartphone, you don’t actually get the phone for free or for a low price. Instead, carriers subsidise the phone (i.e., they buy the phones from phone makers), and recuperate the costs through your monthly bill. This subsidy model is the cornerstone for the success of otherwise expensive phones like the latest iPhone, Galaxy SIII, the One X, and so on. Without carrier subsidies, people would have to pay the price of these phones – usually €600-700 – up front, which would certainly negatively affect the sales figures of these expensive devices.
This is where The Netherlands is getting interesting. Up until a few years ago, phones here were heavily subsidised. My iPhone 3GS, then only recently introduced, was free with a two-year €30 /month contract with unlimited data. Skip forward two years, and my Galaxy SII, just as new as the 3GS then, cost €149 with a two-year €35/month contract with sort-of unlimited data (speed gets limited once you hit a certain amount of data; I never manage to do so).
Dutch carriers are currently reducing subsidies, so customers have to pay more up front when signing a new contract/renewing their contract. Some carriers have even moved to leasing phones, where carriers retain ownership of the phone and you pay a monthly fee. According to market research company Gfk, this is having interesting effects on the market place.
Gfk has seen a sharp increase in the number of people who sign what is called a SIM-only contract (no phone, just the SIM card), and a separate phone. In other words, people are buying their phones separately, and pick a SIM-only contract to match, since this could be cheaper in the long run.
Like I said, I have no idea if the same thing is happening in other countries, but if so, this could have a serious effect on the industry. You see, if people are suddenly confronted with the real price of a smartphone, will they still buy the expensive phones which are so popular today? If they want an iPhone, will they go for an iPhone 4S (€699) or an iPhone 4 (€499)? If they want a Galaxy, will they opt for an SIII (€599), an SII (€419), or heck, an Ace (€209)? Even I had to look these prices up, and was surprised to see the SIII is cheaper than the 4S.
I am convinced all these carrier subsidies have had a very distorting effect on the industry and smartphone sales figures, and their decline or even outright disappearance will, in my view, cause a shift to cheaper smartphones. Sure, an SIII has a faster processor, but next to an SII, will people be willing to pay €180 extra for it?
I doubt it.
If this is indeed a worldwide trend, and it persists, the industry could look very different one or two years from now.
Well, Thom, here in Brazil it’s the exact opposite situation. We’ve always paid for our phones, since subsides were pretty low and phone charges were high. But now, we’re leaning heavily towards carriers/manufacters tie-in, and it’s a pretty big market, so i don’t think it’s a worldwide trend.
There is a lot of talk among all of major EU operators to drop the subsidised prices altogether. The operators get much more flexibility and you get better plans.
I doubt that the subsidies will be dropped, but more and more operators are going for leasing model(where you pay for your plan and separate payment for your phone – like you would paying out a lease with 0% interest)
I’ve read elsewhere that the carrier subsidies and plans in the USA tend to make the iPhone look as affordable as other options (or make those other options looks as expensive).
In EU and elsewhere, there is otherwise a significant difference in total cost of ownership, with Android devices tending to be quite a bit cheaper than the iPhone.
I wonder how much of this is part of secret contracts between Apple and the USA carriers? Would Apple enjoy the same lead it has in USA without these deals?
Well the Hipster to Average Joe ratio in the U.S. is currently somewhere around 6:1, so there is a built in iPhone market right there.
All joking aside, the only time I’ve seen an iPhone go for $0 on contract is a refurbished “last year’s” model. All new iPhones on the four major U.S. carriers have some cash due up front, and always have to my knowledge. In fact, the first generation on AT&T was a whopping $499 for the 8GB model, and when I got mine a couple of months before the launch of the 3G, I still had to pay that $499 and had to sign a contract extension! It was the first and last iPhone I owned, as I found it to be extremely lacking in every regard except as an iPod, which the person I eventually sold it to intended to use it as.
Anyway, I do think there are some major differences behind the scenes when it comes to the Apple/carrier relationships versus the other manufacturer relationships. It’s one reason that we see Android phones with far superior hardware compared to the iPhone going for as low as $49 on contract.
Another major factor of course, is what I alluded to in my opening line: Image means a lot to the younger crowd here. Having an iPhone that does half the things a cheaper Android or even WP7 phone does is nothing compared to the status symbol that the great Apple devices provide. Teens and twentysomethings can be quite vocal in their contempt for what they consider a “loser’s phone” or “geek’s phone”. Combine that with the prevalence of Apple products in general among the music and movie industry icons, and you have a bona fide Cult of Apple situation.
There is another factor which is the private offer.
At some point I was getting out of cycle iPhone offers from AT&T. They offered $15 for the latest version if I switched to a data plan. There was never an Android offer, it was always iPhone.
You can also get a good offer if you claim that Verizon/Tmobile is trying to court you. Those 50 and 100 dollar phone fees will disappear real fast, especially if you plan on getting more than the basic plan.
Funny how’s that from a place which supposedly prides itself on consumer choices…
(but then, it also doesn’t seem to notice a paradox of cherishing choices …while limiting its political debate to two-sides popularity contest & false dichotomies, discouraging thorough debates)
Anyway, don’t those “teens and twentysomethings” realise what kind of image they really project?
(BTW, I was a kind of Apple supporter and promoter for some time …but I stopped when, during the last few years, large part of Apple crowd lost any dignity – I guess due to suddenly them being “into” an actually successful company; I just don’t want to be associated with that kind of people)
Edited 2012-08-25 00:18 UTC
Its true, here in the USA nobody buys their phones and with the carrier subsidies you are usually looking at $100-$199 for just about any decent smartphone. Its only in the last 6 months that things have started to change a little and that’s only because Walmart has been heavily advertising its $120 Android phone with their $50 a month unlimited plan.
But even with Walmart getting into the game there is this…well stigma for want of a better word…around those that aren’t on a plan, because buying your own phone and pay as you go has been strictly the realm of the poor here in the USA.
I would rather just pay the $600+ up front and pay a cheaper monthly rate, thereby saving money over time. However, with some carriers in the US (like Verizon), the monthly fee is the same whether you buy the phone up front, or get it at a subsidized rate. Therefore, it makes no sense to pay full price on the phone.
This may be different on other carriers in the US, but not sure. I’m on my parents’ family plan on AT&T now, so saving quite a bit from what I was paying with Verizon.
Beginning of August, I got 4 – Samsung Galaxy Nexus Phones, 1 – Motorola Droid RAZR and plenty of addons/accessories with a total bill “pre-subsidy” of nearly $4,000.
Post subsidy: $159.62, including all fees and setup.
I’m also paying about $70 less per month than I was with 2 – Droid-X, 1 – LG Ultimate Java Phone, 2 – Nokia “Text and Phone” phones. And now is with a data plan that matches what I’ve used in the last 2 years with the DroidX and a USB Broadband Modem. Additional bandwidth in 2GB Chunks is only $10. I have no limit phone minutes and texts. My daughters (one married with 2 kids, other in 2nd year College) use about 14,000/month of texts. I get about 2000 pages from monitoring systems. My oldest daughter has her phone hermetically attached to her ear, when she isn’t texting. My Wife in on the other end of many of the minutes and texts from both my Daughters. My Son-in-law uses about 700 minutes a month (mostly to my oldest daughter) and about 4 texts.
Other than that, I feel I got a pretty good plan and some really nice phones (for almost dirt). Once you wrangle the Battery usage issue on the Nexus Phone… it lasts about 3 days for me and about 35 hours for my wife. Which is longer than each of our previous phones. (Me DroidX and her the Java Phone)
So… I feel sorry for you peeps getting Subsidies dropped.
I’m happy that you feel you are getting a good deal. I, however, am confused by your summary. How much are you paying each month?
Not to speak for gfolkert, but it’s been my experience that Verizon is the most expensive carrier by far. Like all of the other carriers, I get a 15% government discount even on personal plans, and I was trying to choose between Sprint and Verizon last year. Though Verizon had a better choice of phone hardware (they even still offered the BlackBerry Storm 2, a great phone in my opinion), I ultimately went with Sprint because the monthly bill was nearly $30 less for more features.
With Verizon I would have been paying, after taxes and fees, nearly $120/month for one phone with 2GB of hard capped data, unlimited voice minutes and unlimited texts. With Sprint I get truly unlimited data, unlimited texts and 450 minutes of voice (with free calling to any wireless number) for about $90/month. Given that I use, on average, 30 voice minutes a month, it was a no-brainer. I still got a very nice WP7 phone for free, in fact I preferred the HTC Arrive because of the keyboard, and I saved enough on the bill over the past few months to justify buying a Nexus S 4G so I’ll have a great Android phone too.
In the interest of full disclosure, we have a femtocell (or whatever Sprint calls it) at the office since all the deputies and administrators are issued Sprint phones. This means I get a nearly perfect signal anywhere in the building. With Verizon the opposite is true; finding a good signal inside is an exercise in frustration. However, this had very little impact on my decision since I rarely use my phone at work for more than reading Kindle books and listening to music stored locally on the phone.
I would not be surprised if this was written by a bot
Go screw yourself bucky… umm Fergy.
I was paying $338 per month for all 6 devices before the switch.
Now… I pay $265 including the extra data for all 6 devices. A deal.
Unless you want to own all of the phone from day one.
That is why i got a medium range phone.
It does the basic, just as well as one of the top line.
I use it for calling, texting, music, dropbox(and “clones”), travel planning, news and mail.
It is extremely hard to sell expensive phones without carier subsidies.
http://www.tech-thoughts.net/2012/05/proof-of-iphones-dependence-on…
They could offer a low interest loan (“financing”) instead. That’s essentially what they do anyway but they don’t let you see the details which makes it harder to know if you are being ripped off.
T-Mobile USA does this. Based on your credit score (and from my understanding their policy is very liberal) they give you an interest-free loan to get a more expensive phone. Your payments are spread out over the first six or so monthly bills.
Of course, the reason they do this is obvious; they want to sell you the most expensive phone they can. I’m very careful with my credit so I declined that offer back when I first joined T-Mobile, and opted to buy a lesser phone with the cash I had on hand. I didn’t regret it as I was very satisfied with the phone (BB Curve 8520).
For the iPhone, sure. Because it’s not just an expensive piece of hardware to produce, but Apple isn’t willing to reduce the price charged to network operators.
Soo, the outcome of this trend? byePhone.
In Belgium you clearly haven’t done the maths when you choose to pay your (smart)phone with your contract. I have seen contracts where you easily pay triple the price compared to the same contract and phone seperately.
We are lucky that all phones (as far as I know) that are sold here are simlock free, so you can easily choose another phone or sell your phone to someone else.
I think that all people I know have bought their phone seperate from their contract and that is also true for the more expensive smartphones.
We have paying the full price for mobile for a long time in India. Hence having mobiles at various price point is good idea here. Nokia rose to no.1 with that strategy and samsung is following it.
iPhone share is very very low here, with Android leading the segment.
Indonesia. Same here.
And I won’t go for high-end phone, cause it’s overpriced. When I want to buy high-end phone, then my choice is absolutely: xiaomi mi one.
I live in Pakistan and we pay full price for the phone too. The biggest advantage is in the cost of airtime. We have some of the lowest mobile network charges in the world!
80% of the phones sold in Pakistan are under $30 in price. Basically dumb phones of Chinese origin.
Only the elite can afford smart phones and they usually go for Android phones I think.
Network charges are low here as well. Data charges are costly but increased competition has already halved the price. I don’t even pay monthly rental. Just charge when i need it.
In the UK we have always had low subsidies on the iPhone and other Smart phones. At the moment though, all of the subsides at increasing. Example? My first iPhone cost over £100 on an 18month contract for £35 a month. My next was similar in cost, but on a 24month contract. Now, you can get a 3GS free on a cheaper contract and a 4 free on my contract level.
As a comparison, the Galaxy 3 is free on a similar contract, or under £50 – depends on which provider or reseller you go to. But the android phones have always had better/ larger subsidies, which is one reason they sell so well here.
The new iphone will have to be similar to the Galaxy 3 to compete.
I disagree with this, look at the cost to get a Samsung Galaxy Ace, its the cheapest decent smartphone out there and its (imo) costly on a monthly contract (£20/m). Compare to an iPhone 4 which mostly starts at £35/m and you’re already £300 under the buyâ€in cost of the device.
Operators are passing the purchase cost of iPhone onto their cheaper handsets…
You can get a Galaxy Ace 2 for £15.50 per month on T-Mobile with a comparable data allowance to the £35 iPhone contract. You can get the original Galaxy Ace for £10 if you go with the Carphone Warehouse’s own virtual provider. You can get a Galaxy S 3 for £31 from Orange, £28 on Carphone Warehouse’s own (but with a crappy data allowance.) You need to shop around a bit, but the deals are there. Carphone Warehouse also don’t lock their handsets unless they specifically state is is locked at point of sale.
iPhone 4 is still pretty much £35 minimum from everyone.
So, I stand by what I’m saying – Android phones tend to be sold for less, no matter what the actual handset cost is. I don’t know why. It’s just the way it is.
But that doesn’t mean such Androids must get higher subsidies – might be as well that they are less expensive in the first place for the carriers (IIRC, there were some reports that Apple is very unwilling to buckle WRT their deals with carriers)
The future you described is the past and present here in Belgium. And you can see it’s effects: only spoiled rich kids and wealthy businessmen own an iPhone or a high-end Android smartphone. The rest of us uses budget phones instead.
On a side note: combined phone and SIM-card subscriptions do exist here, but they’re not very popular for some weird reason.
It’s too bad, phone like xiao mi doesn’t exported outside China. I’m in Indonesia, and am badly want theirs. They sell ~$200 phone with dual core 1.5GHz, 1GB ram, 16GB space, 1930MAh battery. Damn. That’s too good for that price. Or $310 for quad core 1.5GHz, 2GB ram, 16GB space, 2000MAh (can choose 300MAh) if one wants it. Built quality is good too.
Man!
In Denmark it has for several years been normal to buy phones without subscription. Especially since the period of subscriber lock-in was reduced to a maximum of 6 months. This made it difficult for the carriers to charge a subscription premium, as people will then switch to a cheaper SIM-only subscription after the 6 months. All this creates a more healthy market with more choice for us consumers.
Anyway all this is only possible because the GSM people mandated the use of the SIM card back then, making it possible to switch your phone between carriers. It is a wonder the SIM card still lives on!
Those damn Euro-commies…
Edited 2012-08-25 00:01 UTC
A couple years back I got a Nokia C5-00 phone for 3 €/mo with a two-year contract. That means the phone will cost me 72 euros in total, while the retail price at the time was twice that. I think the fee for the telephone line is 1 €/mo, which means the total price for the deal will be about 100 euros. That doesn’t include any texting nor talk time, though, but I was granted a free 512 kbps 3G internet connection because I have a wired broadband connection from the same company.
Currently the operators are introducing schemes in which the customer would pay 50-75 % of the retail price beforehand. They do still offer the low-priced options aswell, though the prices have gone up maybe about 30 % during the two years of time.
Due to the arrival of a new telecom provider (Free) which no phone bundling at first so the cost of the phone bundling is now shown in cost comparison.
The french market is very different now than it was 6 months ago indeed.
Currently, the people with a subsidized phone are those who are stuck in a contract since before the arrival of free. New contracts are more often without a phone than with a phone. I was a bouygues customer with a 2 years contract when free entered the market. I just called Bouygues and asked what they would do with my overpriced contract. Result: they migrated the contract to B&YOU for free. So now I’m no more tied to my 2 years contract and I won’t pay for my subsidized phone. I can even freely move to free if I want to.
The phones are cheap on eBay.
My wife’s contract ended early this year for her iPhone 3GS, and we worked out that all-in it had cost over £1000 for the phone and two years service.
So she bought an HP Veer for £90 and got a £7 a month contract. Thats just £258 for a phone that she prefers to the iPhone and 2 years contract.
My Palm Pre contract ended around the same time. My total over 2 years was £840. I bought an HP Pre 3 for £120 (including touchstone charging stand), and got an £11 a month sim-only contract. Thats £384 for a significant upgrade (i love this phone) including 2 years service!
Edited 2012-08-18 13:17 UTC
With each generation of phone, there are fewer and fewer compelling reasons to upgrade the hardware. I plan on keeping my current phone (Sony xperia arc) and switching to a cheaper sim only plan for my next contract. I’m sure others doing the same is one reason for more people going sim only.
I guess, it’s somewhat like with laptops and desktops.
The hardware is now that fast. You have no reason to upgrade all the time. Because the phone will run the software just fine.
You upgrade the features, no need to buy a phone, were the manufactor (nokia/sony/samsung/etc.) give the new phone/line some extra feature and such.
First off phones are getting better very quickly. But even if they weren’t, the life of the average smartphone is 11.5 months. Without replacement via. warranty, upgrades… you would lose a huge chunk of the market.
I’m not sure if they still do but they used to offer subsidy less plans. The problem was that it was more expensive to buy phones with no subsidy and subscribe to the plan, then it was to buy the subsided phone and the higher per month plan over the life of the contract.
Right now I’m kind of off contract, I will end up buying a new subsided phone just so the phone company isn’t make more money than they should off of me.
For what it’s worth, one thing that carriers here (in the US) sometimes do is tie the subsidized phone upgrades to forced plan “upgrades” (to capped, more expensive data). So, it can be beneficial to buy the phone from a third-party (harder for CDMA phones, but possible) at full price, then activate it (for CDMA) or insert the SIM.
Not my experience at all. I still have friends on at&t’s unlimited data plan. The subsidy is so great, that I don’t think you’d financially benefit from turning it down, long term unless your data usage in the new plan would be over $20 a month extra.
They will get their share of money either way, from the carrier… (sure, likely lower prices with such bulk deals – but in some ways preferable: assured future sales; and usually with less flexibility, slower decreases of pricing over time, when compared to consumer market)
Edited 2012-08-24 23:45 UTC
This is the current trend in the US. I work for T-mobile USA and have been seeing it among all the major carriers.
In Poland, subsidies have been heavy and popular for as long as I can remember, and this doesn’t seem to be changing. I haven’t paid more than 1 PLN (≈ €0.25) for a (smart)phone for years. Smartphones haven’t been very popular until recently and still aren’t with the middle generation (40–50 year olds). The leading manufacturer is Samsung. I’m not sure about the lower places, but my impression is that HTC is quite strong, perhaps on par with Nokia. The former sells smartphones to young people, the latter its classics to the elders. iPhones are rare, perhaps just a little more popular than virtually non-existent Lumias.
Edited 2012-08-19 12:23 UTC
That’s not strictly true, not so simple. There’s also a huge group of people, mostly young ones & among the first to adopt a new tech like smartphones, who use prepaid or inexpensive plans – hence they obviously buy upfront & own their phones.
Deals with the devil and “free” phones seem to me to largely be the stronghold of the middle generation that you mention, who basically don’t know any better and/or are gullible to what the salesman pushes on them.
“and was surprised to see the SIII is cheaper than the 4S”
And several other people as well, but – thinking of people I know – mostly U.S. people, many of whom got accustomed to phones being “cheap” and monthly plans to be as they are. As for myself, when a phone comes out, I always check the unlocked non-contractual non-sim versions’ prices first, since I’ve bought 90% of my phones this way. Why? Because it has always been cheaper in the long run, I wasn’t forced into contracts which I didn’t want, I wasn’t limited how often and for how much I could change phones or my plans, and so on and so forth. Also, a lot of carriers keep offering old – e.g. 1+ years old – phones for ridiculous prices still, and either pricing the new models even above those, or giving them for cheap but for really incredible sums for monthly plans. So scr*w them very much, I like my plans cheap and fitting my needs and not paying double price for a phone (split over e.g. 24 months) with an associated “required” plan if I don’t have to – and I don’t.
Edited 2012-08-19 14:57 UTC
The situation in Spain is quite turbulent. Spain has always been a huge telecom market and a quite advanced country. We are heavy mobile users and always like to have the best gear with us.
However, since early this year the two (out of three) major carriers have completely stopped (well, with some small, temporary comebacks) subsidies. This has had a huge impact in sales. As an example, in April and May iPhone sales dropped below 5% where Android is selling almost 80% of the smartphones (we guess it’s low-end Android phones).
But subsidies have been a major factor in Spain’s really high plan prices. They’re evil, you pay your phone several times in your plan bill and you’re trapped without being able to change plans to the ever lower plans we have in Spain –as there’s a hefty competition (we have over 30 carriers here to choose from).
We run a blog (http://www.wizzbill.com/blog) were we explain as much as possible the Spanish mobile market and how to save money. We also wrote a post specially on this topic (http://www.wizzbill.com/el-fin-de-las-subvenciones-en-los-moviles-c…). I’m sorry it’s all in Spanish, but you may find it interesting to translate it.
Well…
At first, from the late 80, until mid 90’s, phones and plans were for bussiness only. Extremely expensive for both.
Then in the 90’s phones went to be cheap, and the plans were really expensive. And the plans went to be cheaper and cheaper. In order to snatch consumers.
New companies started to offer really, really cheap plans only. Not selling or giving away phones at all. Plans only, you see…. You could still buy a phone for 1 danish kroner, and that changed too… Plans were cheap, phones began to get more expensive. Slowly.
Then in the last couple of years, from circa 2008. Operators began to change their bussiness.
Now you get a plan, pay for a cheap phone, and then a monthly fee for the phone (plus the plan of course).
They say it’s better. Yet… When all is paid, you have mannaged to save just a couple of percentages on the phone. That is why i have bought my phone cash…
I get a phone that is not operator locked, full of operator bloatware and it’s all mine from day one.
I get to keep my beloved operator, as they only “serve” the connection. And it’s cheap.
25$ us dollars (149 danish kroners) for: 6 hours + 6 Gigabyte + free sms+mms. And…. Double up on that for the rest of the year…
I paid 298$ us dollars (1799 danish kroners) for my phone (galaxy s plus).
I am happy…
At least for the USA the subsidies make a lot of sense and I don’t think they are likely to disappear.
1) People tend to underestimate how much phone quality matters in their overall enjoyment of their cell phone plan
2) Enjoyment correlates heavily with usage
3) Customers are more willing to spend money month by month than all at once.
_____
Therefore:
If customers buy there own phones they use substantially less data,minutes and texts than if they given more expensive phones than they would buy for themselves. Those more expensive phones are easily absorbed by the carrier’s monthly bills. Moving to something like the prepay model will substantially drop the total phone expenses for the average American as they cut back on their usage.
Increasing subsidies and phone quality makes sense. The carriers via huge subsidies were able move 40% of Americans from dumb phones to smart phones (with $30 / mo or more data costs). That during bad economic times. Why would they want to move away from this model?
Typical American Economics.
Consumers spend more when the true cost of the phone is ‘hidden’ in the monthly bill. Basic math is beyond the skill set of the average consumer.
The problem is that “SIM only” type phone plans are cheaper but AFAIK t-mobile is the only major carrier to offer this in the US. Also the low cost carriers require that you buy a full priced phone from them to sign up so a used or unlocked phone is not an option.
You know, being more frugal is really not a bad thing…
Conversely, it’s not necessarily a good thing when people are more profligate… (also, higher prices don’t have to mean better quality especially in the realm of electronic toys) Well, sure, advantageous to profiteers, but so what? (and kinda like “the first one is free”)
Plus it’s… scary & sad how you manage to gloat about it in the context of “bad economic times” – which, ultimately, are a reflection of a whole major country of people with staggering rates of living on a credit (and in more than just financial form, also this http://en.wikipedia.org/wiki/File:Human_welfare_and_ecological_foot… insanity for example)
Edited 2012-08-25 00:09 UTC
Here in the US, it seems that carriers are increasingly chafing at the cost (to them) of phone subsidies. New-contract phone prices have slowly risen, touching the $350 US barrier. New fees have been added; Verizon now charges a $30 “upgrade fee”, which erased completely the incentive they offered me to renew my contract recently (I actually renewed to keep my unlimited data _and_ get a subsidized phone). And the period one must wait before being eligible to get a new subsidized phone has increased.
On the other hand, with no technological incentive to upgrade phones and renew contracts, as there was with the advent of LTE, maybe they’ll have to keep subsidies around in some form to reduce churn.
It’s interesting to hear that Dutch carriers subsidize phones, as I had understood that most of Europe’s carriers did not. Even here in the US, one can generally get a new subsidized phone every 1.5-2 years, so I’m not sure how much an impact the subsidies have on frequent upgraders.
Besides that, the phone makers are already hurting, at least if they are not Apple or Samsung. Motorola is laying people off. HTC has had two consecutive quarterly losses (see what happens when you don’t release kernel source?
Nokia is all but dead. It may be a moot point in the end.
And the mobile carriers are paying attention. There are lots of reasons why they’re rethinking their reliance on subsidies, but wanting to have a choice of suppliers certainly plays into it.
They don’t want to find themselves in a duopoly world, with a choice between Apple and Samsung, and nobody else.
Many (most?) European (!=EU) carriers did; but there’s a shift away.
Anyway, worldwide, strong majority of the 5+ billion mobile subscribers does own their phones, and uses prepaid.
Yep, I’m doing that. I get a vanilla, unlocked phone without any crap on it and pay for the cheapest SIM card deal I can get away with.
Quite, even better is not bothering to top-up and just having people call you so TCO is about £30/40 for a couple of years.
In Lithuania some carriers expressed their unwillingness to sell subsidized phones in the press and introduced a “monthly phone payment” so you can make monthly interest-free payments instead of paying whole price for your phone straight off. I checked carrier websites and it seems to be the rule with the exception of iPhone.
Carriers don’t really subsidize. You pay for your phone, just add up the monthly bills.
I guess they get a decent discount on a large order of iPhones. The 600 euro retail price is a bit inflated.
In the Netherlands you could get a decent enough internet abo for 10 euro a month but all companies increased the price at the same time.
Because the big earner of 25/35 cents per sms(text)
which cost them nothing disappeared and they now have to find other ways to keep the money flowing in.