Black Friday deals signal heated wireless battle

Big Three gave free iPhone7s with cell plans

TORONTO • Steep Black Friday discounts on hardware, particularly the iPhone 7, surprised analysts who expect hotter-than-normal competition among wireless carriers this holiday season.

The Big Three —

and — all offered the iPhone 7 for free in stores on the shopping holiday even though it was just released two months prior.

“We do not recall seeing in the past an iPhone model discounted to $0 in the same year of its launch,” Barclays analyst Phillip Huang wrote in a note to clients.

The iPhone 7 deal wasn’t widely advertised and spread by word of mouth.

It was only offered on premium plans, RBC Capital Markets analyst Drew McReynolds noted, yet still came “much earlier than expected.” The move will add higher subsidy costs to an already heightened cost of acquiring customers this quarter, McReynolds noted. This is an important metric for investors.

Older iPhone models were also offered for free with up to $150 in gifts thrown in by retailers such as Best Buy and Wireless Wave, and the Google Pixel and Samsung S7 were also priced at zero across the Big Three.

Promotional activity was higher than the same period last year, McReynolds wrote.

The deals have since disappeared, although Huang expects they’ll be back by Christmas and throughout the week between Boxing Day and New Year’s Day. The holiday season is often less competitive than the backto-school period, but Huang anticipates heavier competition this year.

“(Fourth-quarter) wireless margins are thus likely to see increased year-over-year