Risks and impact of handset financing: lessons from the US

GSMA Intelligence is today publishing a research note on the impact of handset financing, specifically drawing on the US for implications for operators.

Since the launch of handset financing plans in 2013, the US market has rapidly embraced the schemes over the traditional subsidy model of mobile contracts. In addition to equipment instalment plans, handset financing in the US has evolved to include leasing models, adding a further layer of complexity for operators in terms of implementation and accounting impact. Handset financing fundamentally changes the way operators book their revenue and costs, and as a result has heavily affected operators’ top-line financials.

Although the US market is unique in many respects, operators in other markets should be aware of the factors that drove the adoption of handset financing in the US, and the implications if it is used as a competitive lever in their domestic markets.