Carriers Bent Out of Shape By iPhone

Posted in iPhone News by admin. Published October 20th, 2014

Carriers Bent Out of Shape By iPhone

It is that time of year again for America’s wireless carriers.

The launch of Apple’s latest iPhone—a device with a fanatical following—is always a seminal event. Record initial sales of its new models suggest such devotion persists. But while fans remain loyal to the phone, carriers are another matter.

This is the first iPhone launch where all four major carriers offer the new device. T-Mobile US was the last to begin selling the iPhone in early 2013. And the industry has become far more competitive, featuring aggressive promotions and carriers offering to cover the cost of early termination of customers’ contracts with rivals.

Against this backdrop, iPhone customers are more likely to also consider switching carriers when they upgrade their devices. AT&T, which has carried the iPhone since its debut in 2007, may have the most to lose. Roughly half its postpaid subscriber base is using iPhones activated between the third quarter of 2012 and the second quarter of 2014, according to estimates by MoffettNathanson. That compares with 32.7% for Sprint,  29.1% for Verizon Communications and 22.5% for T-Mobile.

AT&T’s iPhone customers may be tempted by lower prices at T-Mobile or Sprint. As AT&T has pushed new plans that separate the cost of a phone from that of service, it has also extended those service prices to about 17 million customers on traditional plans. Since they already had phones, AT&T waived the monthly phone charges, effectively giving them a big discount. That will disappear if they upgrade, because they will then need to pay for their new phones.

Granted, subscribers may be swayed by the relative superiority of AT&T’s network. But with monthly bills rising, expect some AT&T iPhone subscribers to start roaming.



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