Telcos' profits under pressure on larger Android offtake

Only M1 is making sales.

According to DMG Research, the telcos' subscriber acquisition cost (SAC) fell slightly during the quarter due to the larger offtake of Android handsets, which made up 60-70% of smartphone sales vs <50% two quarters ago.

The exception was M1, which revealed that it sold more higher-end Android handsets
during the quarter, pushing SAC 4% higher q-o-q. SingTel’s SAC fell 1.4% q-o-q (-5.6% y-o-y) to SGD284, the lowest level since the iPhone was introduced back in 2009.

DMG Research suspects the decline in industry SAC may be temporary and will start to pick up again in 2H2013 with the impending launch of new handset models such as the Samsung Galaxy Note III and iPhone 5s/5c.

"We think handset subsidies are unlikely
to decline significantly as telcoscontinue to drive smartphone adoption and the takeup of tiered plans."

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