THE WRAP: Smartphones drive carrier profit; CDMA iPhone en route to China

Staff writer
05 Aug 2011

Smartphones stood front and center this week, fueling Q2 earnings at carriers across the globe and retail sales in Europe’s big-five markets, but analysts and regulators warned of the impact the devices can have on data networks and even personal relationships.

Deutsche Telekom was the latest European carrier to report growing mobile data income as a result of higher smartphone sales during the second quarter. Even its struggling T-Mobile USA business saw the benefits of the devices, however the higher smartphone sales couldn’t help the firm grow profit, which fell 26.7% year-on-year.

The German incumbent was riding a wave of growing smartphone penetration across Europe’s big-five markets that fueled an 80% rise in the number of consumers accessing online retail sites from their smart devices, comScore revealed. Overall mobile access to such sites hit 13.5 million in the three months to end-May.

Higher sales of smartphones also powered a 30% rise in Hutchison Telecommunications’ mobile data revenues in Hong Kong and Macau during 2Q. The operator grew overall profit 37% to HK$494 million ($63.3 million).

Across the water in South Korea, incumbent SK Telecom stated it is on-track to sign up ten million smartphone customers in 2011 after hitting 7.5 million subscribers by end-June. The high-spending users helped the firm to a marginal rise in EBITDA margin to 31.3% during the period, as overall profit grew 3.7% to 465.4 billion won ($438 million).

The connection between higher smartphone sales and data earnings is good news for China Telecom, which is reportedly set to launch a CDMA version of Apple’s iPhone in the back half of the year.

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