Trefis: iPhone responsible for 25% of AT&T’s mobile revenue, 43% of stock value

“AT&T’s stock depends on the iPhone and how future smartphone data revenues trend. We estimate that AT&T’s mobile phones and wireless plans (including data) constitute about 43% of AT&T’s stock value and that about 25% of AT&T’s mobile revenues are attributable to the iPhone,” Trefis reports for SeekingAlpha.

“Competing US mobile providers like Verizon and Sprint are looking to offer the iPhone to their subscribers and the consequences of iPhone competition can be meaningful for AT&T’s wireless data revenues,” Trefis writes. “iPhone exclusivity has helped AT&T consistently gain wireless market share in recent years. The company’s wireless business had revenues of about $54 billion in 2009 and we estimate that 13 million iPhone subscribers spending $90 – $95 per month account for about 25% of current wireless revenues.”

“Based on our iPhone subscriber and monthly spend estimates, AT&T earns more than $1 billion per month from iPhone revenues,” Trefis writes. “AT&T subsidizes about $400 of the iPhone purchase price. Within an iPhone ARPU of around $90 – $95, it takes AT&T about 5 months on average to earn back the subsidy cost.”

Trefis reports, “By modifying our data ARPU forecast, you can see how AT&T’s stock would be impacted if future ARPU growth were slower than we forecast as a result of the availability of the iPhone on competing networks (Verizon, Sprint, T-Mobile).”

Full article here.

13 Comments

  1. When iPhone was first announced (over 3 years ago), most industry analysts have been reporting about 5-year exclusive agreement with AT&T, citing ‘reliable sources’. Sometime last year, many bloggers begun floating this 3-year number (wishful thinking?), implying that by the time next iPhone arrives, it will be on multiple networks.

    Well, three years have come and gone (iPhone was announced in January 2007), and we still don’t have any announcements of other networks. We’ll know for sure in June (when the new iPhone model comes), but I have seen no specific new information that would indicate that the original reports of 5 years weren’t correct.

    If you want an iPhone and are waiting for Verizon, you may as well bite the AT&T bullet, or look at Droid. I wouldn’t hold my breath if I were you.

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