Apple isn’t delaying bringing its latest iPhone to regional carriers this time around, with launches across the U.S. going out today, at a list of carriers that includes C Spire, Bluegrass Cellular, Appalachian Wireless, Alaska GCI, Cricket Wireless, Cellcom and nTelos Wireless. It’s a change from the way things used to work that’s significant for both the carriers and their customers, in a market when access to hardware is a key competitive metric.
All of the companies above are getting the iPhone 5 just one week after it’s going out to the big national networks of Verizon, AT&T and Sprint. That’s a lot faster than the 4S hit regional carriers last time around, and a world of difference away from what happened when the first iPhone arrived, and it was limited only to AT&T due to an exclusivity arrangement that lasted until the iPhone 4 came to Verizon in 2011.
I spoke with nTelos spokesman Mike Minnis, to find out what near-parity in terms of iPhone 5 launch times means for the carrier, and how customers have responded to the option of having the latest and greatest right away on networks that for many years were treated as second-class citizens, at least when it comes to Apple’s latest hardware.
“A week after the national carriers, to be able to offer our value proposition to our customers with the most iconic device in the world right now is a great opportunity for us,” he said. “For the first time, when the new iPhone was announced, we were able to announce on the same day that we’d provide it September 28, we were able to immediately start registering subscriber interest, and that response has been tremendous.”
The ability for smaller carriers like nTelos to say, ‘Hey, we’ve got that too,” should not be underestimated. Since AT&T introduced the iPhone in 2007, it’s seen subscriber growth of 14.9%. Compare that to just 4.69% growth for Verizon, and an actual dip of 3.86% percent for Sprint. In February, T-Mobile announced a subscriber loss of 706,000 customers during a three-month period, something the company’s CEO ascribed to not carrying the iPhone in a written statement. The iPhone is a compelling device, once capable of convincing people to change their mind’s about who they use as a wireless carrier.
Regional carriers still face other hurdles even with the iPhone 5, including networks that mostly can’t handle new powerful LTE speeds, and having to deal with Apple’s considerable up front subsidy costs, which regularly see the biggest carriers adjusting financial targets down for an iPhone launch quarter. Minnis acknowledged that footing the initial bill is a challenge. But he hinted that running a smaller, leaner operation might actually help nTelos and other small carriers have an advantage over larger national providers when it comes to costs.
“I can’t really speak to the details of how it’s working financially,” he said. “But we’ve had the position in the marketplace as the best value in wireless, so we have to be efficient in everything we do to achieve that and pass the value on to customers.”
nTelos is offering a better deal, with iPhone 5 on contract pricing for a two-year term ranging from $149.99 for the 16GB, to $249.99 for the 32GB model and $349.99 for the 64GB. The iPhone 4S will remain available for $49.99 as well, meaning that across the board, nTelos pricing undercuts that of the big three by $50. Likewise, Cellcom is offering a similar pricing breakdwon, as is Bluegrass Cellular and many of the other carriers on the list mentioned above.
The iPhone 5 is also the first Apple smartphone to be offered on pre-paid plans, available today on Cricket Wireless starting at $499 with no contract commitment. Cricket’s LTE network is just getting started, however, but it will be offering the latest smartphone in 50 different markets across the U.S., and its plans are cheaper than comparable ones at AT&T, Sprint and Verizon.
It’s true that those large national carriers got a week’s head start, but for the first time, there’s a relatively level playing field (though Minnis notes he expects the iPhone 5 to be in short supply at regional carriers, at least initially), which translates into greater choice for consumers and significant, launch window pricing competition for the first time in the iPhone’s history.