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Verizon Tops AT&T iPhones On Revenue Per User

While iPhone users generate less income, on average, than Verizon smartphone owners, they are also more susceptible to bill shock, finds Validas.



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AT&T iPhone users are more likely to suffer "bill shock" than Verizon Wireless smartphone users -- even though the latter generates average revenue of $105.45 per user, as opposed to $98.20 average per user for iPhones, according to wireless bill analysis firm Validas.

"When you look at the AT&T iPhone users in detail, you see that a higher percentage of them are receiving surprisingly large bills,'' upwards of more than $500 per phone, per month, explained Ed Finegold, chief analytics officer at Validas. "This is mostly due to overages and international charges, but when those spike, it then drives up taxes and carrier surcharges." The figures do not include Blackberry users, he said.

At least 6% of iPhone users receive bills of more than $200 per month, compared with less than 5% of Verizon Wireless smartphone users, Validas reported. In addition, more than 1% of iPhone users have monthly bills of more than $500, compared with less than 0.5% of Verizon Wireless smartphone users.

Among the other findings was "an explosion in data usage and in average revenue per user in the fourth quarter of 2009 for Verizon smartphone users,'' noted Finegold. That indicates a growing user group primarily among so-called "power users," he said, whereas the iPhone attracts a lot of power users as well as a lot of casual users.

There is a lot of social cache that comes with using the iPhone, Finegold said, but added that a lot of the new Verizon Wireless devices -- especially the Androids -- are attracting power users who want to get the technology in their hands and see what it can do, so they tend to use more data and spend more using those handsets.

"On the aggregate, the iPhone is still ahead and still generating more dollars because it has a bigger usage community, but Verizon is catching up as they add more and more power users,'' he said. "So the question becomes, as they add more casual users, do the averages start to flatten out and fall in line with the iPhone or go below the iPhone?" All signs point to Verizon catching up fairly quickly to the iPhone in terms of the user experience with its smartphones and in the amount of data people are using and in spending, he noted.

The numbers suggest there is less predictability overall with AT&T smartphone bills than with Verizon Wireless smartphone bills, said Finegold, and more flexibility in Verizon bills. "What the data is suggesting is that it's the end result of plan structures, penalty structures, and fee structures,'' which he added are confusing and difficult to compare side by side. "So at the end of the day, you can only look at the results."

Validas will issue a new report on wireless data consumption from 2009-2010 on September 1.

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