Is the iPhone Bad for Carriers?
Posted by: Olga Kharif on December 08, 2008
Denmark-based researcher Strand Consult just came out with a list of reasons why carriers should run away from the iPhone. Talk about a contrarian view. Today, carriers like AT&T are touting the iPhone as a tool that helps them attract new subscribers and to increase their revenue per user.
As contrarian as Strand’s view sounds, many of these reasons make a lot of sense. For example, Strand suggests that many of the iPhone buyers have been heavy wireless data users before the iPhone came out. So while carriers like AT&T may claim that all their iPhone holders buy a wireless data plan, that may not be much of a deviation from these users’ prior purchasing habits.
Another bummer: Owners use their iPhone browsers to view ordinary Web sites instead of sites optimized for mobile phones. An ordinary Web site runs around 1 Megabyte, while a mobile version is typically less than 100 Kilobytes. “It is significantly cheaper for an operator to produce 100 Kb data than it is to produce 1 MB data, and it is much more fun to deliver 100 KB rather than 1 MB when you are selling data at a flat rate,” Strand explains. In other words, iPhone users are a major drain on a carrier’s network resources — more so than users of other phones.
Strand lists a ton of other issues carriers may face due to the iPhone. But here’s the bottom line: “There are already a number of operators that have issued profit warnings related to their iPhone ventures and our research shows that there is not one single Apple partner in the world among the mobile operators that has increased their overall turnover, profit and market share due to the iPhone,” according to Strand. Lots of food for thought.