2012 predictions: 20:20 Mobile MD James Browning


20:20 Mobile managing director James Browning thinks the networks may well remove subsidies within prepay, marking a major shift to SIM-free and thus changing the dynamic within the industry

“The key to next year will be what happens in prepay and whether the networks can finally stand by their aspirations to remove subsidy altogether.

“They have stated this intention before but in the past subsidy has reappeared within months. This time there does appear to be more desire to make it work. If subsidy really does come out this time, there will be a major shift from prepay to SIM-free.

“This would change the dynamic within the industry greatly, with more direct contact between the manufacturers and those who can sell SIM-free products successfully.

“Networks would take more of a back seat, becoming a secondary decision after handset choice, which is something they have fought against for some time. It would then put the point of sale into far higher focus, with more direct conversations and of course marketing monies making it past the networks and into retailers’ hands.

Manufacturers would therefore have a stronger voice and you would see a real fight of ‘hero handsets’ in the high street.

“A SIM-free model would also drive greater value in the handset market because subsidies have often meant that cost prices have been less important than in standard ‘cost-plus’ markets.”