The iPhone is a nightmare for carriers(money.cnn.com)
money.cnn.com
The iPhone is a nightmare for carriers
http://money.cnn.com/2012/02/08/technology/iphone_carrier_subsidy/index.htm
4 comments
With iphone every carrier now claims they gained new customers or kept more of existing, they all suffer in profits and they all hope to gain back in a couple of years. and here comes removal of the unlimited data plans, the increase of price for devices and plans. Apple is happy, carriers think they ll be happy, and iphone buyers are the happiest. Is there something wrong in this picture, or is this a non-zero sum game where mobile growth lures more profits from elsewhere?
Oh no. the carriers aren't getting as big of a profit margin as they "deserve". Please. The prices and fees that the carries charge you to do anything are more than enough to get them through this difficult time when their margins are dropping but their subscriber rates are soaring and data profits are through the roof.
Good.
The companies want their high "EBITDA service margins", which were 40+% and are now around 10%. Since they can't force Apple down, they are suffering, and planning to make up for it by raising service fees on their users.
The shame! The sorrow! Take pity on poor Verizon (whose "profit [in 2011Q3]" doubled during the last quarter, bolstered by customers attracted by its portfolio of iPhone and Android devices."; they sold 4.2 million iPhones in Q4). Remember sad AT&T ("profit [in Q3] of $3.6 billion", and 7.6 million iPhones). Lend support to Sprint, whose "bid to lure subscribers to its network is its unlimited data plan, which AT&T and Verizon no longer offer." “The iPhone helped AT&T reverse the tide and boosted Verizon’s portfolio. It is having a similar net-positive effect on Sprint as well.”
If only evil Apple hadn't come onto the scene and ruined the profit margins of the phone companies!