Mobile operator J-Phone, part of Vodafone’s Japan Telecom unit, has said it will cut handset subsidies while increasing retailer incentives. The company will retail fewer handsets, but aims to get a much higher price for those that it does sell.
The change in strategy is part of J-Phone’s plan to raise its margins before interest, taxes, depreciation and amortization to 30% by 2005. It echoes a change that the rest of the Vodafone group made last year, cutting subsidies on pre-pay handsets to drive uptake of higher margin contract customers.
J-Phone has also said it still expects to launch its 3G services by June. However, until early 2003 it will only be able to offer single-mode handsets, which will only work in areas where the company’s 3G network is in place.
The company also plans to centralize the purchasing of handsets and network equipment, in a bid to cut costs and therefore boost margins.