Wireless carrier margins likely took a big hit in Q4
The fourth-quarter earnings season will get underway later this month, and analysts at Jefferies think that the major US wireless carriers are likely going to report weaker margins than they did in the third quarter of 2012. According to a research note from Jefferies analysts, AT&T Mobility and Verizon Wireless are likely to report much weaker wireless margins than they did in the third quarter. AT&T reported a 30.6 per cent margin in the third quarter and Verizon reported a 43.4 per cent margin.
The main culprit comes as little surprise: higher subsidy costs, especially for Apple’s iPhone 5. “Supply constraints on the newly released iPhone 5 in 3Q abated in 4Q, which led to record smartphone sales, and consequently, lower margins across the industry,” the analysts wrote.
FierceWireless: Analysts: Wireless carriers' margins likely took a big hit in Q4; TelecomTV content partner.