OXFORD, United Kingdom-Looking to gain market share in an increasingly saturated market has seen the Dutch arm of cell-phone operator MmO2 scrap all handset subsidies and cut mobile call charges by up to 50 percent. The company claimed it is the first European cell-phone operator to drop handset subsidies, estimated at around 250 euros (US$248) per customer.
According to Ton aan de Stegge, MmO2’s Dutch chief executive officer (CEO), with market penetration approaching 80 percent, the time looked right to take this sort of action. “We will see if the customer is willing to pay more for the phone in exchange for much lower rates. We’re changing the game,” he said.
Aan de Stegge added that his competitors in the Netherlands are increasing subsidies so much that it has caused the government and consumer groups to complain about a lack of tariff transparency in the industry. “This is something very specific to the Netherlands, but my colleagues are following what we’re doing very closely to see the results,” he said.
Meanwhile, Orange is replacing its range of cell-phone tariffs in the United Kingdom with one simple charge that will allow users to choose from a selection of all-inclusive minute bundles in return for a fixed fee (see related “Europe” news). The company, which is also looking to compete with Virgin Mobile’s simple pricing plan and is preparing for 3G pricing, said the move is an attempt to make call charges easier to understand and to broaden Orange’s consumer appeal.
