America is the crucible of subsidy in telecoms. This menace has now spread into many markets and opened the doors of financial malpractice. This finest form of crime has been, by far, limited to networks. Now the idea of subsiding the handsets is being promoted. Heaven knows that GSMA coined the Ultra Low Cost Handset (ULCH) initiative five years ago. The objective was to promote handsets bellow US$50 price tag. Motorola won the deal and sub $30 became business as usual with the other vendors thereafter. Exploding growth in China and India is attributed to ULCH. There is no scheme of subsidizing the handsets anymore in the developing world. Pity the Americans are sweetening this flat stuff in 2011. Subsidy will possibly take another giant leap in this land of opportunity. Good news is, unlike America’s infamous subsidies to various segments of agriculture, the idea of subsidizing handsets will not harm us. Read full report.
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