Roger Entner, SVP, Head of Research and Insights, Telecom Practice
With the telecom landscape in constant flux, carriers continue to find unique ways to add to their bottom lines. While the Kindle, Amazon’s wireless reading device , has been touted as a savior for the newspaper industry, it also represents the first example of the long-predicted ad hoc subscription model for Sprint, which provides the wireless access for Kindle as subsidized by Amazon. Sales of the Kindle drove a majority of Sprint’s 394,000 wholesale additions in Q1.
But because Kindle is included in Sprint’s overall subscriber numbers, the carrier will see pressure on its average revenue per user (ARPU) numbers going forward if ad hoc subscriptions become a significant business. We estimate that Kindle may only represent $2 ARPU compared to approximately $56 for a postpaid Sprint subscriber, however.
Another alternative model is the state-sponsored Lifeline Services available through TracFone. These Lifeline Services enable low-income Americans to receive free wireless service with 40 to 80 minutes of use per month, depending on their state of residence, and this model is rapidly becoming a source of growth for TracFone.
The increase in prepaid subscriber share in Q1 is a trend we see continuing well into the second quarter. With the average consumer more concerned with budgets and bottom lines, it only follows that the disruptive unlimited players will continue gaining ground against the traditional carriers across many US markets.
Read additional Telecom insights in Nielsen’s U.S. Telecom Quarterly.
[...] help carriers grow their subscriptions at the expense of annual revenue per user, according to a report out today from Nielsen. The audience tracking company also follows wireless subscriptions and, in its analysis of [...]
[...] пишет, что в условиях кризиса операторы находят [...]
[...] Amazon Kindle users, but those same metrics don’t look so pretty when Nielson breaks down the estimated Kindle ARPU for Sprint: Just $2, compared to approximately $56 to Sprint’s average post-paid phone service [...]
Very interesting nuggets about the Kindle. As connected devices like Kindle grow, operators will have a tendency to include those numbers in subscriber counts. I guess then then the industry will have to update current thinking about the equations between the topline, subscriber numbers and ARPU.
Question – Any estimates on the cost of acquisition for a Kindle (and other M2M) subscriber for Sprint?
[...] Kindle users earn Sprint $2/month, HP’s eReader Posted on May 27, 2009 by switch11 * GigaOm says that the Average Revenue Per Month Sprint makes from Kindle owners is around $2 (originally from Nielsen Wire). [...]
[...] The good news for Sprint is that the Kindle provided the majority of their new subscribers…the bad news is that they get only $2 per month in revenue from Kindle subscribers while they get $56 per month for their average postpaid subscriber: http://blog.nielsen.com/nielsenwire/consumer/telecom-sees-lift-from-kindle-and-other-alternative-sou... [...]
Keep in mind that Sprint doesn’t have to provide a device subsidy, render bills, or provide care for these subs, which are significant cost drivers associated with their “normal” subs. Also, it is pretty unlikely that people download books while driving at busy hour. The $2 (or whatever it is) is effectively pure profit.
Leave your response!
Recent Stories
Monthly Archive
Top Ads
Most Commented
Nielsen Company Blogs