Carriers Worldwide Are Feeling The Pressure From Discounting The iPhone

iphone pricing

We already knew that AT&T’s margins have been hurting because of the iPhone, but as it turns out heavy iPhone subsidies by operators around the world have failed to increase profits, and in many cases, even deteriorated them, according to a report by Strand Consult.

AT&T (NYSE: T) and other operators have been willing to subsidize the device to a very consumer-friendly low of about $199 in return for having an exclusive. The carriers hope to make up the difference through bigger data plans, but that will take months, if not more than a year to recoup upfront costs.

But it’s pretty shocking that the Copenhagen-based wireless consultancy found that not one of the operators selling the iPhone has increased market share, revenue, or earnings because of the device, and instead, “some operators have sent out profit warnings because of the iPhone,” Reuters reports.

Here’s a couple of examples (not counting AT&T): SingTel in Southeast Asia has said the iPhone alone hurt operating profit margin by 3 to 4 percentage points and TeliaSonera has launched the iPhone in all of the Nordic countries, but it has not lifted market share or revenues per user (ARPU).

The report summarizes: “Simply put, many of the conclusions that the media have published about the significance of the iPhone for mobile operators are not documented in the operators

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