Category Archives: equipment sales

Why operators should refrain from handset sales

Teeter signThe first mobile operators have already reached the tipping point where handset revenue exceeds service revenue. The only reason why the average handset revenue isn’t higher than 14% of total revenue is subsidisation: Handset cost averagely stands for 30% of operator OPEX.

The increase in handset sales is bad news for the EBITDA margin of operators. Even with a positive gross margin on handset sales, total EBITDA margin is diluted. The issue is deeper than handset subsidisation: Even when at its best, handset retail is a low margin business. Should operators opt-out?

Download analysis: tefficient public efficiency analysis 3 2013 Handset sales