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Chinese authorities are reportedly unhappy with how much China’s three state-owned wireless carriers, China Mobile Ltd, China Unicom Ltd, and China Telecom Corp spent on handset subsidies and promotions. As a result, all three carriers will be forced to cut spending in both areas by a combined 40 billion Chinese yuan (roughly $6.5 billion) in the following three years, as reported by Focus Taiwan.
Subsidies exist as a way to mitigate the upfront cost of devices that carry a heavier price tag, especially those from established brands. The new policy, brought forth in July, will likely hurt these devices’ manufacturers, such as Lenovo, Huawei, Samsung, HTC, and many more who rely on subsidies to sell their devices to consumers and make a profit. Earlier this month, China Mobile Ltd. told its investors its handset subsidies would be lowered to 6 billion yuan (roughly $976 million) in the second half of 2014.
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I feel more countries should also crack down on some smartphone subsidies, so subsidies which sell phones for $1-100 or give the phone away for free as a way to trick people into paying hundreds to thousands of dollars more on their smartphone bills after paying cell bills for 2 years or more.
Subsidies exist as a way to mitigate the upfront cost of devices that carry a heavier price tag, especially those from established brands. The new policy, brought forth in July, will likely hurt these devices’ manufacturers, such as Lenovo, Huawei, Samsung, HTC, and many more who rely on subsidies to sell their devices to consumers and make a profit. Earlier this month, China Mobile Ltd. told its investors its handset subsidies would be lowered to 6 billion yuan (roughly $976 million) in the second half of 2014.
Read more
I feel more countries should also crack down on some smartphone subsidies, so subsidies which sell phones for $1-100 or give the phone away for free as a way to trick people into paying hundreds to thousands of dollars more on their smartphone bills after paying cell bills for 2 years or more.
