How much of your cellphone bill is profit for the carrier?
Ever wondered how much of your cellphone bill is actually profit for your carrier ? T-Mobile provides a slight hint in its Q1 financial results, released today.
According to the company, average revenue per user, generally referred to as ARPU, was about $51 per quarter. The cash cost per user (CCPU) - a cost factor that includes "all network and general and administrative costs as well as the subsidy loss unrelated to customer acquisition" - was $25.66 during the quarter, which brings the average profit per user to about the same level.
Yes, we know, this calculation is too simple and does not provide any indication about the general profitability of the company, as the CCPU does not include many other factors of the firm’s operating cost. However, the balance sheet let’s us believe that pretty much half of your cellphone bill is available to the carrier for uses other than maintaining your basic service - this, for example, would include customer acquisition or marketing costs.
Overall, T-Mobile reported a healthy $241 million net income and revenues of $3.39 billion, up from $2.85 billion for the same period in 2005 for the quarter. During the first three months of the year, the company was able to add 1.04 million new customers.