Czech Carrier Ditches iPhone, Blames Apple's 'Business Terms'
Czech carrier Telefonica Czech Republic (TCR) is refusing to carry Apple’s iPhone 4S and is dropping all prior iPhone models according to Bloomberg.
TCR’s move is in response to unfair “business terms.” The terms in question are most likely the industry leading subsidies Apple requires from carriers to sell their devices. Obviously “business terms” is a loaded phrase, but Sprint’s CEO revealed Apple’s subsudies are as much as $200 higher per device versus their competitors.
TCR isn’t a small player in the telecom world either, they’ve been one of Apple’s biggest supporters up until this announcement. The company brought the iPhone to Spain and the U.K first with O2. However, competition from Vodafone and T-Mobile in the Czech Republic could have spurred the decision as well. Especially if both companies, who started selling the iPhone 4S late last month, received better subsidy deals.
From a business standpoint TCR is a bit of a Catch-22. Either you bite the bullet and sell the iPhone 4S hoping the initial cost is paid back via new subscribers and subscription fees, or you nix the device and hope the savings is enough to outweigh any potential gains of carrying the device.
Sprint’s decision to carry the iPhone 4S and essentially bet the entire company on a single phone and phone maker represents the antithesis to TCR’s move. It’ll be interesting to see which company ultimately reaps the greatest benefit.