Worrying News From The Netherlands

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Worrying News From The Netherlands, KPN and T-Mobile to cut handset susidisation

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kam_

Aug 14 2006, 07:17

Post #21

Diehard

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The dutch market is very different to others across europe, and is fast aproaching the danish model where nearly every network charges about the same discount rate.

It's VERY VERY unlikely that this will happen in places like france, germany and the UK where competition between networks is still high. In the UK for example the prepay market is growing at an unprecidented rate and the only incentive networks have are promotional subsidies. If they reduce their prepay tariffs too low, they jeaprodise their contract tarrifs.

While prepay phones are being subsidised contract surely have to as well. At worst (or best depends how you look at it) the networks may try out contract only tarrifs again. If you look at the figures tho, the true price of the same tarrif varies drastically across the market.
On one side you have the clueless idiot who buys the cheapest phone the retail store pushed on him, with a super high line rental tarriff. Here the cost of the tariff is super high, and comission is huge for the retailer/network.
On the other side you have the shrude geek who's checked all over google and found the most subsidised handset on that same tarriff. Here the true cost of the tariff is much much lower and the retailer/network makes almost nothing - they expect to make calls on SMS or calls not covered by the plan.
On average the network makes somewhere between these two - so 'subsidy' makes sense for them.
Remember subsidy works both ways for them.

When they say the market is more adult what they really mean is that its got to a point where everyone knows the true value of a tariff. At this point there is no reason to subsidise since it can only work against them. They then think they may as well forget the subsidy and just be up front about the true tariff cost.

Do you really think markets like germany, france and UK have reached this point yet?
Just take a look at the new orange tariffs, surely there are some people out there signing up for these outpriced tarrifs or they would have been withdrawn.

kam_

Aug 14 2006, 07:26

Post #22

Diehard

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QUOTE(danwatson1974 @ Aug 14 2006, 01:48)

I think that I would like to see subsidies by the networks reduced ...it would be nice to see the upgrade market cool down a bit, as it might mean the end to this incessant 'drip feed' of technology by the manufacturers.

I don't agree.. If you want to, you can sign up for contract only today. They'll actually pay you the difference in cash (after month 3 or 6 etc). The networks won't do this directly, but smaller retailers will happily do it. It makes no difference to them, in fact they prefer it. For example take T-Mobile, they force retailers to buy phones from them. They won't allow any returns AT ALL, doesn't matter what the reason is.
I think all the networks are doing this now, which means the retailer is left holding the baby if the network decides to make stupid tariff changes (like orange for example), and no one wants to buy the phones.
Havn't you noticed alot of stores now only seem to hold one or two handsets in stock, and get it shiped to you direct if they can.

QUOTE(Socrates @ Aug 14 2006, 02:03)

I think that if phones weren't subsidized here in the US, the prices for handsets would ultimately come down and there would be more choice.

Then with costs lowered, the cell phone companies would be able to compete more aggressively for pricing minutes either in contracts or on pre-paid plans.

Well that's the whole point. They DONT want to be more agressive on prices. Remember each network has a monopoly on calls to their subscribers. No one else but say t-mobile can connect calls to t-mobile customers.
All they have to do is enough to keep those customers. The outgoing call prices are also high enough that they make a fair ammount there as well. Why crash the mobile call price for now reason? No network wan't to do that - it just decreases profits for everyone!

If subsidy stops, all that will happen is it'll leave (ALOT) less room in the tariff for you to haggle over.

darrellr

Aug 14 2006, 07:39

Post #23

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A couple of thoughts:

First would the operators still customise OEM (i.e. HTC) models and sell them? If they are not subsidising the 'phone why add to its cost?

Secondly it is already clear that people can be attracted by alternative 'sweteners' i.e. Orange and 'free' broadband.

I'd say it is inevitable.

Thumper Net

Aug 14 2006, 07:51

Post #24

The artist formerly known as Peekie
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Kam sadly you are wrong its not only holland who are stopping the subsidie , T mobile germany are the first there with the reduction of the subsidie , the tmob vario2 is one of the first to carry the higher costs to the end user, normally if you get a 2 year contract the phones are always free , but now the vario2 will cost you 250 euros plus the 2 year contract on top. everyone has to remember all the free internet ect have to be paid for in the end ( seems strange the provider that offers unlimited internet are the first to sting you on higher phone costs ), and now the reaper is coming for his money, its best to get the phone you want now as i see the whole of europe in 2007 paying a hell of a lot for the phones , the uk included

Swampie

Aug 14 2006, 11:33

Post #25

Diehard

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I'm sure this will happen in the UK sometime - however, they will have to do it without the 12-month contract (which is there to reclaim the handset subsidy). If there is no subsidy, then there's no need for a contract.

Just go with SIM-only 30 day contract tariffs which are cheaper, and pay the full price for handsets. It'll level out sometime - but whichever network does it first is likely to be unpopular at first.

sxywill2005

Aug 14 2006, 16:42

Post #26

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Well I think the UK wont pay �500 for a phone, we are now used to getting a good deal yet poor customer service

If they were to do this I think that it will raise a few eyebrows as it will completely slow down people buying new contracts. As they will not want a Vario II to last them a few years, not many people can afford it. It would slow people down from buying new handsets, and people wont want a 4G handset as their 3G Vario cost them �500. Then you will end up with the same infrastructure as America and there low quality networks and handsets.

Then you will get Nokia and SE not giving much choice and low R&D budgets which will then be no need for advance mobile OS like Windows Mobile.

Our development is steady, I think people want more minutes. In reference to the Sim only price. O2 does the same but instead say if you was to pay �25 a month you would get double mins/texts than what you would pay with a phone bundled. Virgin also offers an option where you can upgrade your phone or get a lower price per month or more minutes when your contract is up.

I seriously hope that Orange, T-Mobile, Vodafone and O2 don't do what America does as this will result in a masive slide in sales and eventually poor development of services.

chs_arg

Aug 14 2006, 18:24

Post #27

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Oh it looks that argentinian mobile system will apply in Europe

Here whe have to pay the whole price for the handset, of course whe don�t have any smartphone model, just and old Benq (WM 2003se) that is ofered for U$S 600. For a motorola V3i whe have to pay U$S300, there is no subsidize system and no upgrade possibility, if you want a new phone, you have to pay your operator the same price as if you where buying a new line.
Another one, all phones are locked by the operator who sell it.

Thumper Net

Aug 14 2006, 20:09

Post #28

The artist formerly known as Peekie
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The operators are not stupid , they will increase the handset price over a period of time , not in one go, doing it this way the consumer will not really notice they have paid more. With all the new 3g smartphones coming out this is a good time for them to bang up the price , the t mobile vario2 is a good example , this phone will be more expensive than the older vario ever was , and t mob know if you want it you will pay for it , or you dont get it , there will be only 1 winner and thats not us its the operator

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