Implications of Device Financing Plans and Lack of Handset Subsidies for Operator Profitability in Europe

ALBANY, NY, March 17, 2017 : ResearchMoz presents professional and in-depth study of "Implications of Device Financing Plans and Lack of Handset Subsidies for Operator Profitability in Europe".

Operator profitability in the mobile segment in Europe is under pressure, particularly in more mature markets where expensive handsets are often subsidized in order to drive growth in high ARPU postpaid segments. In retracting device subsidy offers, operators have the potential to ease this financial pressure and lower the cost per customer acquisition, as discussed in Section 1. Such strategic shifts can merit rewards but are never risk-free. Section 2 contains specific European case studies (Germany, Netherlands, the United Kingdom and Bulgaria) where other device financing models have been adopted, in addition to the four operators in the US, with particular focus on financial performance. Section 3 focuses on the key factors that operators must take into account when adopting such models (e.g., regulations or consumer purchasing power) before a summary of key findings and recommendations is provided.

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This report, 'Implications of Device Financing Plans and Lack of Handset Subsidies for Operator Profitability in Europe', part of the GlobalData series of Telecom Insider Reports for Europe, examines in detail the dynamics of the mobile devices market in terms of operator handset financing. Specifically, it includes analysis of strategic drivers and implications for operators that have moved away from the widely adopted handset subsidization model, instead looking to alternative methods such as equipment installment plans (EIPs) and leasing.

T-Mobile pioneered the EIP in the US telecom market via its Jump! Plan in 2013, as part of its Un-carrier strategy to simplify and disrupt the consumer market. Since then, competitors AT&T, Verizon and Sprint have followed suit and now offer non-subsidized device financing plans. This report assesses the potential for similar levels of adoption in European markets.

Scope

- Subsidized handsets and lengthy contracts have been a common offering from many operators to support mobile subscriptions growth.
- Pressures on operator profitability in the mobile market may prompt European operators to adopt alternate, non-subsidized device financing models, if they havent already.
- If executed well, withdrawal of handset subsidies and adoption of new financing models can have a positive impact on operator profitability, while offering consumers greater transparency and flexibility.
- Strategic shifts concerning handset financing can have a negative impact on telcos if conditions are not right, as various case studies show.
- Constraints on SIM-locking, MNP and contract duration limits are factors for operators to consider when determining successful handset financing strategies.

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Reasons to buy

- This report examines the dynamics of the mobile devices market in Europe in terms of operator handset financing, providing stakeholders with an in depth view of the market and competitive landscape. Detailed analysis of diverse handset financing models (eg. subsidization, equipment instalment plans and leasing) and the implications for operators that have moved away from the widely adopted handset subsidization model, is invaluable when planning and aligning product offerings moving forwards. This report discusses the recent strategic move to non-subsidized financing plans in the USA and assesses the potential for similar levels of adoption in European markets.
- Helps executives build proactive, profitable growth strategies by offering comprehensive and relevant analysis of handset financing strategies in the European region, regulatory framework, competitive environment and operator best practises.
- The case studies, which give detailed analysis of the effects that alternative handset financing strategies have had on reported operator financial performance, focus on key European markets (Germany, Netherlands, UK, and Bulgaria) as well as the USA and can be beneficial to both local players and prospective market entrants.
- By understanding the interests and positions of key operators in the smartphones market, telecom professionals/operators can develop strategies and increase their market participation.

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