Apple’s demands regarding subsidies is one of the reasons said to be behind MTS and MegaFon’s decision not to renew contracts with the manufacturer
At least two of Russia’s top three mobile operators have not renewed their direct distribution agreements with Apple, due to the subsidies and marketing expense demanded by the Californian manufacturer.
MTS and MegaFon, Russia’s first and second largest operators, signed agreements with Apple to sell its iPhone five years ago but have chosen not to extend these after they expired earlier this year.
Third largest, Vimpelcom, is reported to have done the same, although news reports have suggested it will continue to receive and sell the iPhone from indirect channels.
The decision is thought to be motivated by Apple’s marketing and subsidy demands, which make it harder for operators to make a profit from offering its products.
It is also understood operators have become frustrated with Apple’s policy to offer LTE (the technology usually used for 4G services) versions of its latest release, iPhone 5, to select operators.
In May, the European Commission began an investigation into Apple’s contracts with operators, sending them a questionnaire including questions on whether the manufacturer sets minimum volumes or subsidies.