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  3. > Telecom Player & Market - MNOs, device vendors and subsidies

At a time where smartphones paradoxically drive usages and ARPU, but pressure even more operators profitability, IDATE explains the various reasons behind device subsidies. Analyzing the role of smartphone in the changing relationship between MNOs and device vendors, this insight puts device subsidies into perspective and further delivers our views on where the industry is going regarding this thorny issue.

world,Europe,France,Germany,Italy,Spain,United Kingdom,USA

Table Of Contents

Telecom Player and Market - MNOs, device vendors and subsidies
Table of contents

1. Key findings 5

2. How the smartphone changed the relationship between operators and
device vendors 6

3. Subsidising devices 9

3.1. A usage enabler and an ARPU driver 9
3.2. SIM locking and customer retention 10
3.3. Tighter control over the network 12

4. A changing environment 14

4.1. Strong financial pressure on operators 14
4.2. Development of SIM-only / Commitment-free packages 16
4.3. Toward a multi-tiered subsidisation system 16

5. The case of operator-branded devices 19

5.1. MNOs, terminals and mobile devices 19
5.2. The rationale for operator-branded devices 20
5.3. What future for operator-branded devices? 21


Table 1: Subsidy practices and market characteristics, in 2012 10
Table 2: Regulatory status of SIM locking in selected European countries 10


Figure 1: The iPhone was a turning point in the telecommunication industry 6
Figure 2: Comparison of European (left) and US (right) handsets distribution channel 7
Figure 3: Smartphone shipments worldwide 7
Figure 4: Number of messages sent every day in 2012 8
Figure 5: iPhone 5 price at 3G Hutchison in the UK, by plan 9
Figure 8: Number of months before mobile handsets replacement 11
Figure 9: Mobile subscriber churn rates 11
Figure 10: Number of frequency bands needed in a single terminal 13
Figure 11: Revenue growth rates of various European operators 14
Figure 12: Spanish subsidy levels are the highest in Europe 15
Figure 13: Number portability in Spain 15
Figure 14: Virgin Telib package with low-cost smartphone offered (property of Virgin Mobile) 17
Figure 15: Number of customers not tied to an operator and their share of subscriber base 18
Figure 16: France Telecom Minitel device 19
Figure 17: Orange-branded smartphone M3100, produced and designed by HTC 20
Figure 18: Bouygues Telecom Bs 471 (TLC Alcatel) and Orange San Francisco II (ZTE) 20
Figure 19: Freebox Revolution 21

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