The one key benefit of handset subsidies is that it does make the decision a lot easier or cheaper than it would otherwise ordinarily be. I’m certain that — from one point of view — handset subsidy has been highly beneficial to the evolution of the wireless industry in the UK.
However — and it’s a big however — it’s distorted the market completely and made the business of competition a little bit more challenging. When most operators have at least 50% of their customers locked away on multi-year contracts, the incentive to do anything resembling innovation is limited. Yes, when there’s a bit of pain at the end of the contract when you have to give a few hundred extra minutes to a bleeting customer to avoid them churning, but that’s nothing when compared to actually having to get off your arse and run a successful change programme.
So should the UK do ‘a Chile’? They’ve mandated that every handset sold must now be unlocked so it can be used on any carrier.
This removes one of the primary retention strategies for contract customers. That could only be good for the market, surely?
What do you think?
The Republic of Chile has announced that all cellphones sold within the country starting last Monday, January 2nd, must be unlocked for use on any carrier.