China Mobile has scheduled an event on December 18 and the speculation has been that China Mobile will introduce Apple’s AAPL iPhone. The Wall Street Journal reported this morning that China Mobile will take pre-orders for iPhones starting Thursday.
It is easy to see how a superficial analysis can lead one to conclude that it is a big deal. After all, China Mobile has over 700 million customers and is the last major telecommunications carrier that has held out in not carrying the iPhone. Take a look at the following and make a judgment for yourself.
ARPU
Average revenue per user per month or ARPU as it is commonly known in the industry was only 71 RMB/per user per month in 2011 and declined to 68 RMB/ per user per month is 2012. For 2013, only an interim report is available; it appears that ARPU was 66 RMB per month, or about $11.00 per month.
As a reference consider that in the U. S., Verizon reported postpaid ARPA (average revenue per account) of $150.27 per month. Verizon has been reporting ARPA instead of ARPU because customers can share data.
With about $11.00 per month average revenue per subscriber per month, how many of these subscribers can afford a $700 iPhone?
Only 176 Million 3G Customers
As of October 31, 2013, China Mobile reported 759.274 million customers. However, only 176.019 million customers were 3G customers. The point is that any analysis should take into account only 176 million customers and not 760 million customers. The reason is that customers who have not switched to 3G are not likely to be buying an iPhone…Read more at Forbes
