al and Italy) and handset pricing is optimised through subsidisation or low cost units. This has not been the experience with 3G infrastructures however.68 68 INFRASTRUCTURE TO 2030: TELECOM, LAND TRANSPORT, WATER AND ELECTRICITY ISBN 92-64-02398-4 © OECD 2006 2. TELECOMS INFRASTRUCTURE TO 2030 A further difference to the fixed line operation is the radio technology. Expenditure on more intense and capable customer care services is necessary due to retail handset sales and their provisioning over the air. The major customer care cost is in dealing with problems of the network quality of service and handset failures. Maintaining connection (and reputation) is crucial to obtaining revenues. Negligence, high quality customer care and basic network quality bites into margins. Margins today thus depend on two factors: Quality of network and handsets, and the subsequent levels and quality of customer care. Roaming and termination charges, which are often inflated compared to the costs of provision of these services, at levels perhaps several times that of normal tariffs. Generally mobile operations are more recent and have fewer staff per customer than the legacy operations of fixed line operators. For instance in comparing two operators in a recent acquisition it is notable that the target acquisition (O2, a mobile company) had 24.6 million customers and 15 $ 000 employees (note lines are taken as customers for mobile, in terms of the number of customer cards, or SIM cards), i.e. 1640 customers/employee. In contrast, the acquirer (Telefonica, a mix of largely fixed and some mobile) had quite different ratios with 145 million customers and 173 000 employees, i.e. 838 customers per employee. 69 Telecommunications equipment supplier business models Traditional supplier models have been based on a protective tied or close relation to a local national incumbent. The model is based on initial large R&D expenses being paid for by sales to the local incumbent(s) which then leads to worldwide sales, at lower costs, but increas