RIM to tier service fees based on customer requirements
Heins on conference call regarding RIM's BIS/BES service revenues:
BRIEF-RIM to tier service fees based on customer requirements
6:06pm EST
TORONTO, Dec 20 (Reuters) - Research In Motion Ltd :
* Chief executive Thorsten Heins says service fees will be tiered based on what customers require in terms of security, manageability, other services
* CEO Heins says looking to develop blackberry messenger service to create additional service revenue
* CEO Heins says carriers are committed to spending marketing dollars to promote blackberry 10 devices
* Chief financial officer Brian Bidulka says average revenue per user declined last quarter as company worked to maintain subscriber base
* CEO Heins says may still introduce new blackberry 7 models for more cost-conscious parts of the world
BRIEF-RIM to tier service fees based on customer requirements | Reuters
RIM to tier service fees based on customer requirements
They'll have to find something to replace the 36% of revenue they earned from service fees. The main reason the stock is taking a beating tonight is because everyone knows that service revenue is going to take a massive hit. Carriers no longer want or need to absorb the RinTax. RIM need to announce some plans, see how people react, and adjust from there. I don't see people paying extra for BBM tho and we all know the carriers won't continue to absorb the costs. This will come as a shock to a lot of blackberry users if they start to see new junk fees on their bills.
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RIM to tier service fees based on customer requirements
RIM stock price dropped big time aftermarket (over 10%) allegedly because of this plan on service fee. Even Crackberry is not exactly upbeat about it.
I for one see this positively if implemented well. I am happry paying like USD9/month like I do to local carrier for BIS access but I am sure it is PITA to many consumers. I remembered I felt a little unease when knowing for 1st time this extra premium one needs to pay for the privilege of using BB. In where I am (Hong Kong), I cannot even use BB browser (even with unlimited date plan) without also paying for BIS. It is ULTRA off-putting to consumers, which explains not many peoples use BBs here other than those BES devices issued by their employers.
Tiered plan makes perfect sense to everyone in long run. You pay for service you care for. This will I think help to boost consumers reception of the device and tally well with the BYOD drive with Blackberry Balance. Consumers need to buy devices before they could be plugged in corporate network. I am sure increase in BB10 uptake will off set service fee loss by better hardware earnings.
The key is implementation. RIM has to pace themselves in order not to hurt cash-flow. This 1st interview is not a good start. Now the CEO needs to salvage the situation by conveying clearer message and roadmap on service fee overhaul. I wish they did not reveal that in the interview actually before they implement it.
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