Phone companies have a new best friend: The tablet. Wireless companies have been jockeying for new subscribers in a market where there are more active cellphone plans than there are people, a predicament that led to slowing growth and increased competition. Carriers have found the answer in tablets, which represent one of the few places where the industry can wring out a new source of revenue after the companies have nearly tapped out smartphone upgrades. The companies are offering aggressive promotions to get customers to sign up. But the new tablet connections aren't as attractive as smartphones for two reasons: they don't generate as much revenue as smartphones and they aren't bringing in new customers. Rather, the majority of tablet sales are upgrades to existing customer plans. The lifetime value of a tablet customer to a wireless carrier is $761, about one-third of that of a handset customer, according to New Street Research.
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