NEW YORK (Reuters) - Profits at the three largest U.S. phone carriers are being squeezed by steep discounts on advanced cell phones, triggered by AT&T Inc’s (T.N) hefty subsidy for the iPhone.
AT&T, Verizon Communications Inc (VZ.N) and Sprint Nextel Corp (S.N) are expected to show a drop in wireless profit margins when they report third-quarter results in coming weeks, also feeling the pinch from consumers holding off on buying add-on services like data to lower their phone bills in the weak economy.
Wireless carriers have always shouldered part of a phone’s cost to persuade customers to sign longer-term contracts, but U.S. market leader AT&T lowered the bar when it helped Apple Inc (AAPL.O) launch the latest iPhone for only $200 on July 11.
This forced Verizon Wireless, AT&T’s biggest rival, and Sprint, the No. 3 U.S. mobile service, to follow suit with higher subsidies on their advanced phones, analysts said. While that helps boost service revenue in the longer term, it hurts near-term profits. 3 birmingham cardiac day diet, How long should you stay on the atkins diet, How is baby formed, Zac Efron nude naked Photo, Sarah Palin On SNL With Tina Fey, Kirsten Dunst, Jollibee Philippines, Philippines Sex Scandal, Cebuano Bisaya Philippines