Feeds

Vodafone and pals can't kick the habit of cheap mobe prices

Networks shake off phone subsidies, shed subscribers

Top 5 reasons to deploy VMware with Tegile

Three Spanish operators have been trying to get rid of handset subsidies, which reduce the upfront prices of mobiles provided punters take out not-inexpensive contracts. But according to Strategy Analytics, the telcos' resolve is weakening in the face of falling subscriptions.

Based on retail pricing, which Strategy Analytics gathers weekly for its own customers, the company reckons that Movistar, Vodafone and Yoigo all cut their handset subsidies massively in April this year, resulting in handset prices jumping by more than €100, but three months later the subsidies are mounting again as connections drop off.

Chart showing handset prices

Average upfront costs for mobiles with various operators

Orange was the chief beneficiary it seems, having maintained its subsidy level, as Movistar apparently saw connections drop by 42 per cent over the year and Vodafone dropped by 36 per cent during the three-month experiment.

Operators hate device subsidies, and have tried to get rid of them before, the problem is deciding who goes first. Back in 2004 the Dutch operators had a cunning plan to all dump handset subsidies at the same time, which was brilliant if a tiny bit illegal. That resulted in fines totalling around €30m, and manifestly more careful operators.

Not that subsidies are all bad, they give the operator a measure of control over the hardware. Apple thought the iPhone would sell without subsidies, but quickly realised its mistake and agreed to implement MMS and blocks on tethering in exchange for some operator coin. Google tried something similar with the Nexus, but again bowed to the power of the operators' channel.

European customers are entirely wedded to the modern never-never: our banks might refuse us credit but our network operators will happily hand over a £500 handset for nothing as long as we agree to a ruinous monthly tariff, which is how we like our mobiles and how we intend to keep paying for them. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
Bladerunner sequel might actually be good. Harrison Ford is in it
Go ahead, you're all clear, kid... Sorry, wrong film
Musicians sue UK.gov over 'zero pay' copyright fix
Everyone else in Europe compensates us - why can't you?
I'll be back (and forward): Hollywood's time travel tribulations
Quick, call the Time Cops to sort out this paradox!
Euro Parliament VOTES to BREAK UP GOOGLE. Er, OK then
It CANNA do it, captain.They DON'T have the POWER!
Megaupload overlord Kim Dotcom: The US HAS RADICALISED ME!
Now my lawyers have bailed 'cos I'm 'OFFICIALLY' BROKE
Forget Hillary, HP's ex CARLY FIORINA 'wants to be next US Prez'
Former CEO has political ambitions again, according to Washington DC sources
prev story

Whitepapers

Designing and building an open ITOA architecture
Learn about a new IT data taxonomy defined by the four data sources of IT visibility: wire, machine, agent, and synthetic data sets.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
10 threats to successful enterprise endpoint backup
10 threats to a successful backup including issues with BYOD, slow backups and ineffective security.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
10 ways wire data helps conquer IT complexity
IT teams can automatically detect problems across the IT environment, spot data theft, select unique pieces of transaction payloads to send to a data source, and more.