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Introduction

It has been two years since US operators first decoupled devices from service plans. Now leasing models are gaining traction in the US. But we believe not all operators will follow suit and separate device and service plans or introduce leasing.

Highlights

  • In several regions including Latin America, Western Europe, and North America operators offer separate contracts for handsets and services. The US thrust the issue into the spotlight globally in 2013, when disruptor T-Mobile decoupled. Its rivals followed suit to remain competitive.

Features and Benefits

  • Assesses why the US market has decoupled handsets and service plans, and what this has meant for revenues and take-up.
  • Examines other key device-financing models and asks whether there will be any major changes in the next five years.

Key questions answered

  • Why did the US decouple handsets and what has been the success rate?
  • Have other markets also decoupled and were these measures a success?

Table of contents

Summary

  • In brief
  • Ovum view
  • Recommendations

Market dynamics

  • Decoupling the handset from the service plan
  • Abolishing subsidized service plans in the US
  • Western European operators also decouple handsets
  • Regulatory drivers influence decoupling
  • Canada goes down decoupling road for regulatory reasons
  • Leasing as a device-financing model
  • Early leasing models in Western Europe fail to gain traction
  • Device bundled into postpaid plan for a monthly fee
  • Device bundled into postpaid plan, with cash option
  • Device bundled into plan, with instalments
  • Early upgrades as a device-financing model
  • Cashback offered on various plans, including in China
  • Paying off devices via m-banking
  • Paying off devices via credit card

Market outlook

  • Advantages of device separation in the US
  • Financial impact of decoupling: US experience
  • Impact of device separation on handset replacement cycles
  • Impact of device separation in Europe
  • Will other telcos decouple and follow US and Canada?
  • Outlook in emerging markets
  • Future models

Appendix

  • Methodology
  • Further reading
  • Author

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