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Russian iPhone carrier not happy over price, cites Apple 'dictatorship'

Russian iPhone carrier not happy over price

In the Soviet Union, you got a knockoff Motorola brick phone and you were happy. In modern-day Russia, however, you might want an iPhone from OAO Mobile TeleSystems (MTS). You'll pay over US$1,000 for the privilege. The carrier says that makes the iPhone a tough sell in a competitive market.

MTS executives criticized Apple as being "in a dictatorship mode where they say, 'This is what you have to do or you don't get the iPhone.' Being arrogant with your partners in big markets doesn't pay off." The cost of the iPhone and the strict retail standards that Apple requires for partners are apparently a burden for MTS, and its executives made their complaints known at an event in New York on July 29.

Michael Hecker, MTS's VP of strategy and corporate development, was cited by Bloomberg as saying that Apple would get a larger share of the Russian market by cutting the iPhone's price or helping subsidize it. Russian consumers, unlike those in the U.S., don't sign up for long-term mobile phone contracts, so there's little incentive for carriers to subsidize the cost of the phone the way American carriers do.

After the executives chastised Apple earlier in the day, MTS spokesman Joshua Tulgan smoothed things over by saying that "While we have differences with Apple, we have a constructive relationship. Smartphones like the iPhone are important to our customers and our economy and we want to get them into the hands of as many people as possible."

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