Finland might allow linked sales of 3G mobile phones and service subscriptions
Transport and Communications Ministry hopes to promote widespread use of UMTS technology
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Finland is considering moves to relax legislation that currently makes it illegal to sell mobile telephones and mobile phone service subscriptions as a package deal. The Ministry of Transport and Communications has drafted a bill that would allow the linked sales of third-generation mobile telephones and subscriptions.
The aim of the planned amendment would be to boost the spread of UMTS technology.
The Minister of Transport and Communications, Leena Luhtanen (SDP), said that she wants more discussion on the matter before taking a firm stand.
In almost all other European countries it is common practice for mobile operators to offer subscribers a handset at a discounted price - often below cost. The losses are recouped through higher call charges than those in Finland.
The package deals often include a commitment to stay with the same operator for up to a year, and subscribers often trade in their handset for a new one when they renew their subscription.
Finnish law prohibits making discounts on handsets conditional upon taking a certain service provider. As a result, mobile telephones used by Finns tend to be older models on the average than those in use in many other European countries.
Leena Luhtanen believes that allowing package deals would make it easier for consumers to buy the newer, more expensive models.
Currently the selection of 3G UMTS mobile phones available in stores in Finland is fairly small, and they range in price from about EUR 500 to EUR 600.
In many other countries, the selection is more extensive, and prices range from EUR 300 to EUR 700. Janne Vainio of the service provider Sonera estimates that package deals could knock hundreds of euros off the consumer price of a 3G mobile phone handset.
Another perceived advantage of package deals is that they would make it easier for operators to install special features into the handsets themselves - something which many consumers find difficult to do on their own.
Heikki Pursiainen, a top civil servant at the Ministry of Transport and Communications, says that sales of the third-generation mobile phones have not taken off as well as had been hoped, and that Finland is now lagging behind other countries in the technology.
In many European countries, UMTS mobile phones can be used for video calls and new types of electronic games. E-mail and web surfing is possible at broadband speed.
Finland’s first 3G networks opened in the autumn, and the number of subscribers is estimated at a few thousand. The planned legislative change to allow package deals would be limited to a three-year period, and would not apply to the present GSM standard.
Mobile operator Elisa has called for a broader legalisation of package deals. Elisa’s Pasi Lehmus is satisfied with the ministry’s plan, and thinks that it should be extended beyond UMTS technology.
Although TeliaSonera has previously been unenthusiastic about sales linkages, it is now taking a more positive view, even though Janne Vainio says that it could lead to higher costs for services.
Elisa’s Lehmus is more optimistic, saying that if there is sufficient volume, the higher turnover alone could offset the costs of providing discounts on the handset, without a need to raise the price of calls.
Package deals would also lead to more competition among manufacturers of mobile handsets. As bulk buyers of the hardware, mobile operators would have considerable leverage over Nokia and other manufacturers.
In the view of Nokia, the system of package deals is confusing for consumers.
Helsingin Sanomat
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| 5.4.2005 - TODAY |
 Finland might allow linked sales of 3G mobile phones and service subscriptions
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