There are no active ads.

Advertisement

RIM Under Pressure to Cut Carrier Fees in the U.S.

by Brandon Russell | July 5, 2012July 5, 2012 3:30 pm PDT

thorsten-heinsResearch In Motion is allegedly facing concern from U.S. carriers over the price of fees it charges carriers for access to its BlackBerry server infrastructure, Bloomberg said Thursday. The Waterloo, Canada-based company, whose stock has dropped almost 100 percent in the last four years, currently relies on the carrier fees as one of its biggest annual revenue streams; last year RIM took in $4.09 billion.

Sameet Kanade, a technology analyst at Northern Securities, believes revenue from the monthly fee could drop by as much as 18 percent by 2014, to $2.8 billion, amidst carrier unease. Currently, discussion over fees seems to be a trickle down effect. “As wireless operators face customers’ requests for reduced monthly charges, it becomes harder for those carriers to pass on the subscriber fee,” Kanade said.

The issue is also becoming a problem in emerging markets, where fees climbed 4.1 percent last quarter over the year before. As a result, device sales have fallen 57 percent, which means the cash RIM is taking in from carrier fees is burning up.

“April, May of next year could be a time of reckoning for RIM,” Veritas Research analyst Neeraj Monga said. “It’s a race between what comes first: BB10, zero cash balance or an acquisition.”

The prospect of an acquisition or partnership has crept up over the past several days as RIM’s plight continues. Following news that BB10 was delayed until 2013, rumors have pegged both Microsoft and Google as potential saviors for Research In Motion. However, RIM CEO Thorsten Heins, ever the confident captain, believes the company is merely “challenged,” thus, it is most certainly not in a “death spiral.”

[via Bloomberg]


Brandon Russell

Brandon Russell enjoys writing about technology and entertainment. When he's not watching Back to the Future, you can find him on a hike or watching...

Advertisement

Advertisement

Advertisement