|
Cellular firms Digicel and Cable and Wireless that once aggressively subsidised the cost of handsets, as a strategy to expand the market and win customers, are now charging customers for the full price of each phone, with the result that cellular phone prices have doubled overnight.
A check by the Business Observer shows that phones that cost between $2,000 and $3,000 late last year now sell for $4,000 and more. Industry sources say that the removal of the subsidies comes at a point where the market is believed to have neared saturation with cellular companies, therefore shifting strategy from one of grabbing market share to selling minutes to their existing clients and maintaining the networks. There are about two million cellular customers in Jamaica -with Digicel and C&W accounting for about 95 per cent of the market. MiPhone (Oceanic) accounts for the balance. With a population of just over 2.5 million, Jamaica has one of the highest cell phone penetration in the world. But dealers interviewed by the Business Observer express concern that the sudden doubling of the price could put the instruments out of the reach of the market and negatively impact their business. Cable and Wireless led the way in removing the subsidy - about one-and-a-half months ago. The result is that phones such as the Nokia 1100, which previously sold for around $3,000, now sell for above $6,000. The same is the case for the Motorola C115 - another phone that is considered as being at the low-end of the handset market. In the case of Digicel, it more recently began removing the subsidy. With the new pricing regime the Sony-Erickson T230 that Digicel used to make available to its customers for under $2,500 now sells for more than $5,500. Digicel now lists its Motorola C205 that used to be available for under $2,000, for just under $4,000. Digicel is said to be resorting to a system where phones and SIM cards (the computer chip that is encoded with the telephone number) are sold separately to avoid duplication of clients and artificial number-overcrowding on its network. This happens when customers buy new phones, insert their old SIM cards and discard the old phones. That customer will then have two numbers, but only one would be in use. http://www.jamaicaobserver.com/magazines/Business/html/20050510T230000-0500_80265_OBS_CELL_PHONE_PRICES_DOUBLE_AS_FIRMS_REMOVE_SUBSIDY.asp |
News 
