U.S. Cellular turned down the opportunity to carry the iPhone, presumably both models, reports Fierce Wireless. CEO Mary Dillon announced the fact that the sixth largest carrier in the U.S. passed on the iPhone because Apple’s “terms were unacceptable from a risk and profitability standpoint.”
U.S. Cellular has around 6 million subscribers, making it a relatively small fish in the US cellular game, but it is notable that it will not be carrying the iPhone.
Its much smaller counterpart C Spire Wireless (formerly Cellular South) has announced that it will begin selling the iPhone later this month. C Spire has about 875,000 subscribers currently.
The reasons that U.S. Cellular may not be carrying the iPhone may have a lot to do with the fact that the portion that Apple makes from every iPhone appears to be significantly larger than the amount commanded by other devices. Sprint made a huge buy-in on Apple devices and it has been reported that it pays as much as $200 more for every iPhone sold than the other devices on its network.
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It’s possible that U.S. Cellular may not have been able to stomach the larger amount of subsidy that it would have to pay to Apple per-device in order to carry the iPhone.
It seems like it would be worth it to carry the iPhone regardless, as the subsidies are paid out on a per-device basis, and Sprint’s Dan Hesse has stated that the iPhone is the “number one reason” that users switch away to another carrier. But apparently the economics are different enough that U.S. Cellular feels that it just isn’t worth it for them.
It was mentioned that the potential strain from heavy data usage on the cellular network was not a factor. Dillon says that the company ‘remains open’ to carrying the iPhone in the future.
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