Bastion

Was the iPhone Deal Worth It for AT&T?

Ugh, poor analysis, and it shows a lack of understanding in the general wireless telecom market. We have *huge* customer cost of acquisitions in general, and it is even higher in the smartphone category. Like the other poster said - it is the handset subsidies, which is why you only get them when you agree to sign a long-term contract (notice the words "long" and "term") - because the carrier knows that over the course of the contract the subsidy will be recouped either in monthly charges or an early termination fee.

So, when you get more customers than your current operating budget and conditions support, it does look bad in the short-term. Even my company, which is not AT&T, got a lift in smartphone sales due to the iPhone (I guess a rising tide does lift all boats...), and it affected our short-term budget plans. It's a good "problem" to have.

But make no mistake, getting new customers is never a bad thing, especially those who are some of the most coveted and the current and future drivers of ARPU - data users! To the poster who said that AT&T is losing money on data usage, you're just plain wrong. This is where the money's at.

This is just a continuing symptom of what got us into this leveraged mess of an economy - too much focus on short-term gain!