To have or have not an iPhone in your product mix is becoming less of a dilemma for carriers; what you do with it once you have it is now the challenge. Simon Kearney reports.
The iPhone rush is over. Telecoms research firm Gartner believes those who had to have an iPhone have got theirs and now we are seeing the emergence of longer-term strategies to acquire and hold smart phone subscribers.
“Consumers who wanted an iPhone would have purchased one already,” Gartner research director for carrier operations and strategies Foong King Yew told TelecomTV. “The operators will have to take a long-term view so far as customer value is concerned – subsidies and marketing tend to bring down the margins in the initial stages,” Mr Foong said.
Those fears about acquisition costs have been borne out in SingTel’s latest results. It’s subsidiary Optus in Australia reported a 9 per cent increase in selling costs largely associated with smart phones. SingTel also reported an increase in customer acquisition costs, although it was still able to increase the number of subscribers by 8 per cent and maintain its market-leading position in the city state. Number two player StarHub has followed many other carriers in countries including Britain and now France and included the iPhone in its product mix.
Mr Foonsag said this was about retaining its existing smart phone customers. “The offering of iPhone from StarHub is not going to result in any large gain in new subscribers. Rather, it is to address the demand stemming from StarHub’s own subscriber base and ensure that they don’t churn over to SingTel,” he said.
The carriers face real challenges as the smart phone market changes in front of their eyes. British retailer Tesco has announced it will sell the iPhone while Walmart is planning on selling a Google Android device for around US$30.
Such competition on device sales is the last thing that carriers need.
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