Gartner Research

Market Trends: CSPs Introduce Alternative Device Funding Plans to Discard Subsidies

Published: 28 January 2015

ID: G00260694

Analyst(s): Rishi Tejpal , Gyanee Dewnarain

Summary

Communications service providers are actively considering alternatives to device subsidies to cut operational costs and improve profit margins. CSPs' pricing managers must carefully assess market maturity, consumer behavior and competitive dynamics when selecting the optimal device funding options.

Table Of Contents

Introduction

Market Trend

  • CSPs Introduce Alternative Device Funding Options, Withdrawing Subsidies to Protect Profit Margins
  • Market Structure Trend
    • CSPs in North America Offer Device Installment Plans With Early Renewal Options to Reduce Subsidy Spending
    • Device Leasing Plans Help CSPs Reduce Subsidy Costs and Overcome Entry Barriers to New Devices
    • CSPs Offer Early Renewal and SIM-Only Plans to Ease the Move Away From Subsidies Offering Transparency and Potential Flexibility for Customers
    • Emerging Market CSPs Characterized by Mixed Trends When Offering Device Subsidies
    • Aggressive Competition Drives Excessive Subsidies in South Korea, While Japan Witnesses Counter Trend

Vendors to Watch

Appendix

  • T-Mobile and O2 Plan Details

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