Killing Mobile Phone Subsidies In South Africa?
from the but-why? dept
It's pretty standard practice in the mobile phone industry for the mobile operators to subsidize handset sales (in exchange for which, they lock you into a long contract). There's nothing wrong with that, as it does help increase adoption by lowering the initial hurdle customers face. It's just a reasonable business decision. Lots of companies subsidize some aspect of what they're selling to get people to buy other things. Gaming consoles are subsidized on the expectation that you'll purchase more games. It is, of course, the classic razor/razorblades marketing strategy. However, for some reason, it gets some people upset. Apparently, some people get so upset that they look to ban the practice. The article doesn't have the full details, but apparently there's a proposal in South Africa to ban handset subsidies which seems like the perfect way to slow down mobile phone adoption. If the problem is that people are tied to a single operator for too long -- address that issue, rather than pinning it on the subsidies. If the problem is that some handset makers feel left out, that's a business issue. The channel for handsets is through the operators. If certain vendors are being unfairly cut out, address that issue, rather than the subsidies. There seems like no reasonable explanation to ban subsidies by themselves.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
