Carriers to benefit from the new iPhone along with Apple this year, subscribers on the losing side

Carriers to benefit from the new iPhone along with Apple this year, subscribers on the losing side
AT&T and Verizon have been doing pretty well, since it became clear they are trying to wiggle out of the smartphone subsidy shackles that have plagued their bottomline since the iPhone introduction in 2007. 

By raising the phone upgrade fees, introducing shared data plans, and diversifying their portfolio away from the iOS-Android duopoly, AT&T's stock is up 24% this year, and Verizon's 10%.

The introduction of the new iPhone, analysts believe, will carry that fat margin trend even further for carriers. It is widely believed to include a multiband LTE radio inside, to the extent that the world would be shocked if it didn't, and customers with LTE devices consume twice more data than average - 1.2GB vs 0.5GB for non-LTE subscribers. 

Moreover, tricks like AT&T saying that those who want FaceTime video chat will have to subscribe to the new data plans, are poised to bring in additional revenue. 

Despite Verizon's status as the first to roll out a comprehensive LTE network, only 12% of its 89 million subscribers are using it so far, and the launch of a new iPhone with LTE is likely to lure people into the new and expensive mobile data plans. 

As you can see in the chart, data usage has traditionally spiked with the launch of a new iPhones, but carrier margins have plummetted then due to subsidy expense, so with the new rules in place both Apple and the carriers are preparing to laugh all the way to the bank, while subscribers are likely to see their cell phone bills rise.

source: WSJ

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7 Comments

1. darktranquillity

Posts: 285; Member since: Feb 28, 2012

........ifans on the loosing side. Wonderful!.

2. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

"...only 125 of its 89 million..."? Maybe the numbers are reversed? There are more than 125 VZW LTE subscribers on PA alone....

4. Daniel.P

Posts: 127; Member since: Jul 14, 2011

Fixed, thx!

3. andro.

Posts: 1999; Member since: Sep 16, 2011

Why should anyone be surprised at a headlines saying new iphone to cost ifans even more money?

5. Beholder88

Posts: 86; Member since: Mar 30, 2012

The new data plans are only more expensive if you use more than 2GB of data a month. If you are on a family plan with 2 or more smartphones, you can actually save money on the share everything plans. I've seen this first hand when changing customers over at work. iPhone users are typically in the low to mid range of data usage, and android users are usually the highest. I've also seen little to no correlation with those who have 3G vs 4G phones. It's all in how the person uses the phone.

6. JunitoNH

Posts: 1946; Member since: Feb 15, 2012

As much as I want one, went with the Galaxy Nx, and a T-Mobile $50 prepaid. They are making huge amount of money, so don't expect any changes anytime soon.

7. Sprintfan

Posts: 68; Member since: Nov 18, 2011

No mention of Sprint? Sprint is up more % than VZW and ATT, and the ARPU has had the largest rise in history out of all the major carriers. I would say the iphone had a lot to do with this despite the expensive contract. At the end of the day everyone profits for having an iphone. I have a strange feeling Sprint will benefit the most in the next 2 years from the iphone due to larger subscriber growth and improving ARPU.

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