Excessive handset subsidies in Netherlands come to an end
Following T-Mobile's recent announcement, market leader KPN has also decided to cut the commissions it pays to retailers for selling mobile services in The Netherlands. From September, KPN will gradually reduce handset subsidies and sales commissions. The handset subsidies and excessive sales commissions have been a thorn in the side of operators in recent years amid an increasingly saturated Dutch mobile market. The handset subsidies and sales commission contribute to very high churn rates, reaching 30 percent, but do not add to service revenue growth, putting pressure on profit margins. A reduction was inevitable, but the question was which operator dared to take the first step and risk giving the competition an advantage? The first move by T-Mobile and the recent success of E-Plus in Germany may have helped KPN take the decision to pull the plug on handset subsidies in The Netherlands.
This is a research product from Telecompaper 2000-2010 ©. All rights reserved. Reproduction or redistribution in any form without prior written permission of Telecompaper is prohibited. Telecompaper sees to the utmost reliability of all research and news publications. Nevertheless Telecompaper does not accept any responsibility for possible inaccuracies.