RIM facing demands to cut carrier fees for BlackBerry server accessAlex Wagner - Deputy Managing Editor, News Desk
Time for another installment of Bad News BlackBerrys. Less than a week after RIM announced some not-so-awesome earnings, job cuts and a BlackBerry 10 delay that pushes the OS into next year, a new report has shed light on demands from carriers that the BlackBerry maker reduce the fees that it charges for subscriber access to its BlackBerry server infrastructure. RIM confirmed in its Q1 2013 earnings report that it's being pressured to cut its service fees, but today Bloomberg elaborated on the situation, naming both AT&T and Verizon as operators seeking a fee reduction. The fees bring in around $4.09 billion in annual revenue for RIM and account for more than a third of its overall revenue each year. A RIM spokesperson said that the company "intends to continue generating a revenue stream" from its services but wouldn't talk further about any of the requests for a cut in fees.
Considering how large a chunk of RIM's revenue that these service fees make up, it seems unlikely that the firm would like to try and avoid reducing them as much as possible. That seems especially so given how rough things have been for RIM as of late. One analyst estimates that RIM's revenue from these fees could drop to $3.4 billion this year and $2.8 billion in fiscal 2014, which is still a pretty decent chunk of change, but it's also a bit of a drop from the over $4 billion in revenue that the fees have brought in previously. Despite RIM's current situation, CEO Thorsten Heins has been trying to keep things somewhat upbeat, saying that the company is "very, very challenged" but that it'll emerge from its BlackBerry 10 transition successfully. With BlackBerry 10's debut currently scheduled for Q1 2013, Heins and RIM still have several more "challenging" months to endure before they can prove the CEO's prediction to be accurate.