60% of US wireless carrier sales come through direct channels
About 60% of wireless carrier sales come through direct channels, 40% through indirect channels, reports In-Stat. While carriers prefer sales through their own direct channels because Average Revenue Per User (ARPU) is higher and subscriber acquisition costs are slightly lower, they continue to grow the number of both direct and indirect retail outlets to increase their market reach, the high-tech market research firm says. 25% of sales are made through kiosks today. In-Stat report is based on 55 surveys with US wireless service providers and 105 with firms in their distribution channels.
Most wireless carriers break even on CDMA and GSM handsets. Carriers make somewhat of a profit on GSM/GPRS, GSM/EDGE, W-CDMA (UMTS), CDMA 1xRTT EVDO and iDEN handsets, and lose money on TDMA handsets. There is a nascent trend toward exclusivity, where distribution channels agree to sell one wireless provider’s service. Exclusive distributors typically receive higher compensation and more help with promotions from the carrier.