The Future of Device Subsidy Image

The Future of Device Subsidy

Purchase

Every year the debate around the sustainability of subsidy gets more intense. Industry dynamics continue to build the case against subsidy continuing, yet it continues year after year.

Carriers are, however, increasingly testing the water with alternatives to the traditional subsidy model. Reductions in the amount of subsidy, the current subsidy model or even eliminating it all together will have a dramatic impact on handset sales, particularly at the high end price points. 

This report analyses the state of the subsidy market, it dynamics, future options and impact on the industry.

Table of Contents

  • 1. MOBILE HANDSET SUBSIDY MARKET DYNAMICS
  • 2. CUSTOMER LIFETIME VALUE BEING ERODED
    • 2.1. Product and OS Lifecycles
    • 2.2. Over the Top Revenue
  • 3. SUBSIDY ISN'T GOING TO DISAPPEAR
    • 3.1. Competitive Pressure
    • 3.2. Carrier Influence and Revenue Share
    • 3.3. Two-plus Year Contracts
    • 3.4. Carrier Specifications and Customer Experience
    • 3.5. Carrier's Profit from "Subsidy"
    • 3.6. Strategic Subsidy: Driving the Market
  • 4. BREAKING THE CYCLE: TRANSPARENT HANDSET FINANCING
    • 4.1. Spain: Mixed Results
    • 4.2. France: Younger Customers Want Simplicity, Flexibility
    • 4.3. KPN: The Importance of Simplified Propositions
    • 4.4. Market Development
    • 4.5. Conclusions on Handset Financing
    • 4.6. Recommendations on Handset Financing for Carriers
    • 4.7. Recommendations for Handset OEMs and Others
  • 5. CONCLUSIONS

Tables

  1. Handset Subsidy Percentages and ASPs by Country, August 2013

Charts

  1. Regional Carrier Revenue, World Market, Forecast: 2008 to 2018
  2. Western European Carrier Revenue , Forecast: 2008 to 2013
  3. Mobile Subscriptions by Device Type, Forecast: 2008 to 2018
  4. Handset ASPs by Region, 1Q 2006 to 1Q 2013
  5. Monthly ARPU by Region. Forecast: 2008 to 2018