Telecom cost optimization: How to subsidize handset subsidie
Telecom cost optimization: How to subsidize handset subsidie

Summary/Abstract: The increasingly contentious issue of smartphone subsidies is rapidly ascending to the top of CFO agendas, not only because they present a means of tapping much-anticipated yet unrealized data revenues, but more worryingly because widespread use of such incentives is exerting pressure on the bottom lines of telecoms. For telecom operators chasing growth in mature markets, equipment installment plans, SIM-only offer, sharing subsidy cost with third parties is a way to reduce subsidy budgets, expand the customer base, reduce churn, increase sales and, importantly, increase earnings. While there’s a lot of good in this for carriers and customers, there’s also a significant amount of risk which, if not mitigated, can have a devastating impact on company bottom line. Hence, in a broader sense, the objective of this article is to suggest some steps towards reducing handset subsidies and measures to mitigate the possible risk.

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