Operators Say Handset Subsidies Will Fall

MocoNews points to a survey that says 60 percent of operators expect handset subsidies to fall or stay steady in 2006. As they point out, operators have been talking for a long time about how they'd love to eliminate them, but haven't been too successful at it, since they keep pushing new services that require new handsets. As long as operators maintain their fascination with "the next big thing" and the killer app -- that, like, say, mobile TV require new handsets, subsidies will be necessary. There is one factor that could lower subsidies slightly, however: falling handset prices. Handset manufacturers' margins and average selling prices have been slipping consistently for some time, allowing operators to decrease their subsidies slightly as well. But, as much as operators decry the financial expense of the subsidies, they love the control they let them exercise over customers.