AT&T claims that Iphone customers generate much higher revenue per user than the average, close to $100 a month. However to keep Apple happy, AT&T paid a $400-a-phone subsidy to keep the Iphone cost down for those who signed away their souls on two-year contracts to buy the thing.
For an Iphone customer to make AT&T any cash they have to pay the telecom firm $2,000 a year. If AT&T is right, on average punters are paying $2,400 during that time. But $400 over two years is nothing, really.
But actual revenue figures might be even worse than AT&T is letting on. [...] In fact the Iphone subsidy depressed AT&T profit margins, he claimed.
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Then there is the small problem of AT&T’s network. From day one Apple users have complained that the telecom’s network was not up to scratch. Now they are really hammering it, downloading material online for a flat $30 a month fee.
#1 bobbo: “…ATT has been coasting off old charge structures needed to build out their system but they keep it now that the system is built and paid for…”
That is the problem. AT&T build a wireless network, then sold it. Then they had to buy it back from Craig McCaw in 1994 for $11.5 billion.
So they have had to pay for it more than once.
Trying to comment on more diverse issues
If you want an iPhone and live in America, you dont have to be trapped on AT&T. Just get an unlocked iPhone, or do it yourself, you download a program like QuickPWN etc, plug in the iPhone and BOOM all your AT&T bitching will stop!
Heck, as I often say, I bought a brand new Original iPhone, before they were out in my country (we only got the 3G on) for slightly under $500 american including shipping. I am off plan, I just pay as I go, I must spend around 100 bucks NZ on my iPhone, thats something like $75 US a year, sure I dont use it that much, but eh, I have a cheap iPhone!
I do hope the AT&T deal ends soon for my American friends!
Jay,
Go for it..
Pay $500 for hardware thats worth $100.
Why dont you look at the Ducomo network..I think its available in your area.
#16 – You must be using Bizarro World math.
It is $1000 a year. $2400 for TWO years, less the $400 subsidy, is $2000. $2000 divided by 2 years is $1000/year.
Nick Farrell, the author of the cited Inquirer article, is a moron who can’t do basic math. Can’t believe Dvorak here didn’t recognize that Farrell did an abysmal job of plagiarizing … err, paraphrasing the WSJ article used as the source. My response is posted under the original article on the Inquirer website, but in a nutshell, just do the basic math: 10 million new iPhones times $2000 net revenue per phone equals $20 billion (yes, BILLION) in revenue from the iPhone deal alone over the course of the 2-year contracts. For the mathematically challenged like #16 and Farrell, that’s $10 billion in net revenue per year. Shafted? Give me a break. Someone could shaft me on a daily basis for 1% of that.
Yet another example of people in such a rush to jump on the “let’s bash Apple” bandwagon that they don’t bother to actually think for themselves.
I would be honestly surprised if AT&T truly regretted the iPhone deal. It’s currently the only thing keeping them on top and the very second that they lose their exclusivity they’ll be hurting bad.