iPhone as a source of ARPU


Yeah, yeah, everybody has been talking about iPhone yesterday and today.  iPhone is just invincible, and carriers have love-hate relationship with iPhone, hence they would rather diversify into more OS platforms and have high hope for Windows phones. Hmmm...  Sounds like another case of "seller's interest" first,  "consumers' interest" last...

As always, iPhone issue comes on the top headline of the earning announcement, but looking beyond it, I found the results interesting.

Sprint says they have recorded 1.1 mil. net new subs, and sold 1.5 mil. iPhones, of which 44% are new subs.  Sounds like iPhone is a great attraction to new users, but in fact, in their TOTAL (including Nextel) number, they still have lost 192K customers and net additions come from prepaid and wholesale.  iPhone works just to ease the pain for them.

AT&T's net new sub number was smaller than Sprint, particularly in the key "postpaid" category.  Their new additions mostly come from "connected devices", 230K out of TOTAL 726K net additions.  They sold 4.3 mil. iPhones and obviously they are mostly upgrades.

Verizon is apparently the only one that is still hanging on to the traditional good carrier business, with 501K postpaid new subs out of 734K TOTAL.  They sold 3.2 mil. iPhones.

So it looks like iPhone is just eating up other post paid subs and not so much contributing as the "attraction" to the new customers.

What it actually DOES is to squeeze in ARPU from the existing customers.  AT&T's ARPU reached at no less than $64.46, compared to VZ's $55.43 and SP's $59.88 (all postpaid - if you include prepaid it will be a whole another story).  I am a bit surprised that VZ has lower postpaid ARPU than SP - I don't know why.  There are different explanations in AT&T's announcement for ARPU increase, but generally speaking, it is the "smart phone data plan", in the big picture.

Anyway, at this juncture, major carriers led by AT&T are moving towards "ARPU oriented" and they are taking all sorts of little tricks to increase the rate here and there.  Indirectly for that purpose, iPhone sales for the carriers are still very important.