The Chinese Government’s Subsidy Reduction Directive Bites
China Mobile has announced that it will be cutting handset subsidies by US$2 billion over the next three years in response to the State-owned Assets Supervision and Administration Commission directive to carriers to cut costs by 40 billion yuan (US$6.5 billion) in three years because they are deemed to have overspent on subsidies and marketing. The two other state-owned carriers are similarly obliged to follow suit with rumors of another US$2 billion reduction in subsidies collectively.
All three carriers have outlined their reduction plans to the financial markets in 2Q 2014:
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