Optus parent SingTel has announced that the popularity of the Apple iPhone will actually cost the carrier AU$44 million in Australia in its first quarter of sales.
(Credit: CNET.com)
Optus was one of three carriers in Australia that announced they would support the iPhone as of July. Offering what consumers saw as more attractive plans than Telstra and Vodafone, Optus claimed it accounted "for the majority share of iPhone 3G activations in Australia" during the September quarter.
As a group, SingTel activated some 170,000 iPhones in Australia, Singapore, India and the Phillipines during the period.
But the bargaining power of the Apple brand has come at high cost to the carrier.
"Higher subsidy costs are associated with the iPhone 3G," SingTel said today in a statement to its shareholders. "Consequently, the successful iPhone 3G initiative will have a dilutive impact on earnings and margins in the near term."
The Singapore-based carrier said the cost of selling the iPhone in Australia would reduce its September quarter earnings (EBITDA) by AU$44 million in Australia, and S$27 million in Singapore.
It's not all bad news, however. The carrier boasted that 55 per cent of customers of its new iPhone customers in Australia were new customers to Optus.
In the long-run, the company expects to profit from the data iPhone users consume.
The carrier estimated that iPhone users consumed 1.5 times the amount of data as regular post-paid mobile users. "iPhone subscribers will deliver positive value," the company said.
"Consequently, the successful iPhone 3G initiative will have a dilutive impact on earnings and margins in the near term."
and the fact that these users now know that the Optus network sux will have a dilutive impact on earnings and margins in the longer term