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All carriers being hurt by selling iPhones?

updated 02:00 pm EDT, Mon August 17, 2009

Carriers Hurt by iPhone

Despite claims to the contrary, Apple's iPhone is ultimately hurting the carriers that have picked it up, a Strand Consult study says. The analyst group maintains that "not one" provider offering the iPhone has seen a financial or market share boost since adding it to their rosters. In many cases, these companies have either seen reduced profit from the heavy subsidies needed for the iPhone or haven't seen the surge in data revenues they expected from customers moving to more expensive smartphone plans.

The pressure on AT&T's profits from the iPhone 3G launch in July 2008 is cited as an example, while Singapore's SingTel also reported a squeeze on its profit margins and Scandinavian carrier TeliaSonera has actually reported decreasing market share and average revenues per person in Denmark and Sweden, both of which have the iPhone.

By comparison, some challengers have faired better without the device, the researchers argue.

The study nonetheless appears to gloss over positives for some carriers. AT&T in its latest quarter praised the iPhone 3GS for helping to minimze customer turnover as well as spike its average and data-specific revenues; only its operational expenses increased. The American carrier has fallen to second place behind Verizon in total subscribers, but the latter's victory came through the finalized takeover of Alltel, which added millions of customers.

Canada's Rogers has also reported mixed performance through the iPhone 3GS and has seen its expenses jump upwards but its data revenues have also jumped.

No predictions have been made as to whether any of the underperforming carriers would have fared as well or better without iPhones to sell.



By Electronista Staff
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Comments

  1. Le Flaneur

    Senior User

    Joined: Oct 1999

    +7

    AT&T is very grateful!

    "a Strand Consult study says. The analyst group maintains that "not one" provider offering the iPhone has seen a financial or market share boost since adding it to their rosters."

    Surely that can't be true for AT&T. There is absolutely NO reason why anyone would use AT&T as a carrier if they didn't have an exclusive contract with Apple to sell the iPhone.

  1. iphonerulez

    Fresh-Faced Recruit

    Joined: Nov 2008

    +4

    That's odd...

    I really thought carriers were trying to get the iPhone in order to drive up subscribership and I'd heard that the carriers could get higher monthly payments from those subscribers. If they're losing money, that is the carrier's fault because they're not balancing their books properly. I'm sure the iPhone is doing far better than expected and I don't see AT&T asking out of its contract since I keep hearing they want it extended.

    Well, the carrier's wouldn't be getting any money by not getting more subscribers, either.

  1. Flying Meat

    Junior Member

    Joined: Jan 2007

    +3

    I can't see

    how they wouldn't see revenue boosts from data service, since they all seem to be charging massive fees for that service. The only thing that keeps me from getting an iPhone is the huge expense of the data fees.
    I understand the subsidy of the phone purchase is carried at least in part (probably large part) by the data/service fees, but that's too much. Particularly since the fee won't go down after the carrier has hit the break even point.

  1. shawnce

    Fresh-Faced Recruit

    Joined: Nov 2000

    +5

    correlation != causation

    This report sure reads like badly applied statistics with the typical I see a correlation so it must be the cause mixed with ignoring facts that don't support their premise of the report.

  1. Eldernorm

    Fresh-Faced Recruit

    Joined: Sep 2007

    +4

    More c*** from a salesman

    Are AT&Ts expenses up??? SURE, iPhones cost money.

    But its a one time expense. AT&T has reported several million new customers..... all locked in for two years..

    And the dollars are already up for data plans and AT&T has reported its churn rate down again.

    AT&T is doing great with the iPhone. If not, why would EVERYONE else be trying to copy it. ???

    Just a thought,
    en

  1. code4fun

    Fresh-Faced Recruit

    Joined: Jul 2008

    +3

    patience

    carriers will get their pay off with the 2 year contract lock.

  1. ViktorCode

    Fresh-Faced Recruit

    Joined: Jan 2006

    -2

    common sense

    Why then AT

  1. vasic

    Fresh-Faced Recruit

    Joined: May 2005

    +2

    Massive data fees???

    Some people continue to label data fees for the iPhone "excessive", "massive", "exorbitant". Meanwhile, they are exactly the SAME as all other major smartphones. You can't get Storm, Android, Pre without a data plan. So, how again is iPhone's data plan so expensive compared to others? Surely, we aren't comparing it to ordinary voice plans with throw-away $0 with contract phones?

  1. luckyday

    Fresh-Faced Recruit

    Joined: Apr 2008

    -2

    vasic

    You can get the storm and the bold without a data plan. At least on rogers. Rogers also has cheaper data plans for blackberry, such as a $15 unlimited email and bb messenger. They don't offer anything like that for an iphone.

    Also, the iphone is an internet intensive phone. Without internet, it loses many of its advantages. Therefore, it's pretty obvious why people would want a bigger data plan on an iphone than they would on a blackberry. h***, I love blackberry, but I admit the browser stinks.

  1. luckyday

    Fresh-Faced Recruit

    Joined: Apr 2008

    -3

    vasic

    Also, a lot of the other cool iphone stuff you have to pay extra for. Like visual voicemail and mobileme. You don't pay mobileme as part of your phone bill, but its something to consider.

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