Smartphone Makers Not Happy With Carriers, Move To Online Selling Set To Be Game Changer

Serious questions are being asked about Telstra’s mobile strategy, and it has no bearing on the carrier’s recent network failures, the issue relates solely to the products they range and the price that consumers are asked to pay for a handset.

In September Optus is set to launch Optus branded handsets, a move that has not gone unnoticed by several handset manufacturers who have been told that carriers are “fed up” of building manufacturers brands only to have them sold in competing retail stores.

Another issue facing carrier is they believe that they have been a major contributor to big “brand growth in Australia”.

“But when they get big, as what has happened to Apple and Samsung the carrier loses control and they are not happy with this situation which is why there is a move by carriers to introduce their own branded handsets” said one manufacturer.

Currently Telstra is selling two Telstra Premium branded smartphones one is selling for $10 less than a Galaxy S7.

According to sources this is a case of Telstra testing as to whether they can move house brands from the specialist, and value end of the market to the premium end of the market.

The current model Telstra Premium models are manufactured by HTC and LG Electronics.

Telstra also has a cosy relationship with Chinese smartphone maker ZTE who manufacture several Telstra branded handsets.

The relationship with ZTE, is believed to driven by the close relationship between Andrew Vollard the CEO of Telstra mobile and ZTE executives.

While Telstra only deal with ZTE for house brand phones Optus and Vodafone openly call for tenders from several brands for the supply of house brand phones.

Currently several handset manufacturers are pitching for the Optus house brand contract. The carrier will use the devices to fight Telstra running into the peak summer months.

Recently both Motorola and Alcatel announced that they are set to sell handsets direct via new online sites.

At the same time analysts are telling ChannelNews that there is a “serious” sense of frustration among manufacturers as to the way they are treated by Telstra and to a degree Optus who is currently stripping marketshare away from Telstra who is on their seventh network failure this year.
They claim that in the future Telstra could become a “SIM card” seller with the bulk of handsets sold via retailers or direct by manufacturers who will discount the products not ranged by carriers or retailers.

There is even talk of both Harvey Norman and JB HI Fi selling their own branded or house branded smartphones.

At the same time three major smartphone manufacturers have told ChannelNews that they are moving to selling direct because of the time it takes Telstra to make a decision and the fact that a large percentage of the models that manufacturers have available for ranging are not being selected to be sold in Australia despite the fact that several of the models being offered to carriers are successful overseas.

A classic example is Motorola, Oppo, Alcatel and Huawei.

A visit to these manufacturers stands at a CES, Mobile World Congress or IFA in Berlin reveal the extent to which Australians are being denied access to smartphones, tablets and two in one PC’s manufactured by mobile phone makers.
At CES Motorola had an extensive array of models available many of them were cutting edge and highly popular in markets like the USA and Europe.

While in Barcelona Alcatel, Oppo and Huawei had collectively over 40 products that are not being sold in Australia.

“The choice for the consumer will be massive” The General Manager at one manufacturer said.

ChannelNews understands that by Xmas consumers in Australia will be given the option of buying several new cutting edge smartphones, tablets and new 360 degree cameras and VR headsets online.

One leading Chinese vendor said “In Australia Telstra makes handset vendors jump through hoops when it comes to testing on their network, now we find out that the network is not up to speed and is failing”.

They added “Telstra recently stopped testing Volte on handsets because of problems in their network. How do we now know that it is not the handset that is failing but Telstra’s own network?”.

Another vendor said “Telstra is impossible to deal with they want to control the handset the price and the manufacture has to carry the risk. We are currently aware that Telstra is trying to offload thousands of premium house brand phones that are not selling. What they should have done is taken a risk on a known brand over a Telstra brand. Now with their current network failures consumers are not going to want to buy a Telstra branded handset”.

Neither Optus or Telstra have commented for this story.