3 thoughts on “Telecoms Spend Big To Snag Users”

  1. I couldn’t agree with you more. A law I formulated a couple of years ago says: Whatever you will save in production costs will be gobbled up by Marketing and Sales. In the Telco world this seems to be even worse.

    In the Netherlands a cableco called Casema with 1,3 million subscribers, €310 million revenue and €11.4 million profit was sold for €2.1 billion to Cinven/Warburg. That is €1600/subscriber Add the amounts they spent on advertising, add the introduction of digital tv, add the upgrading of networks for Docsis 2.0b etc. These guys spend well up to €2000 per customer and they actually hope to make a profit.

    However, in The Netherlands T-mobile announced today they will half the bonus per new subscriber they give to resellers like the Phone House. These bonuses could go up to €400/customer for a two year subscription. Now they hope all their competitors will too.

  2. all these service providers have close to zero incremental costs to add users to existing networks/systems (excluding the big upgrade capex, which is best spread across more users). they have every incentive to gain incremental biz

  3. A lot of this money must be spent on the upcoming data plans and Triple play bundles. And a significant portion on getting users switched from competitors, as the market for new users is ‘almost’ stagnated.

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