UK mobile network O2 has seen profits slump in the first quarter of the year as it struggles to retain iPhone customers.
O2 recorded a huge 33 per cent drop in its profits in the first three months of 2012, and its revenue fell by 6 per cent year on year in the same period.
The blame for the fall in profit is being placed squarely at the feet of the iPhone, which O2 had exclusively in the UK until October 2009.
iPhone turns out to be a poisoned Apple
Many lucrative customers signed two year contracts when the iPhone was solely with O2, and now these contracts are up, customers are free to go elsewhere.
In an attempt to hold onto its high-paying iPhone customers, O2 is offering its users discounts to upgrade to the likes of the iPhone 4S, which in turn sees it sacrifice short-term margins in favour of long-term gains.
"The company's efforts in retaining the customer base have shown positive signs in contract churn which will translate into higher retained value going forward," said O2.
Is O2 in crisis and is Apple to blame, or is this just a blip on the radar which will be ironed out later in the year? Let us know your thoughts in the comment box below.
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John joined TechRadar over a decade ago as Staff Writer for Phones, and over the years has built up a vast knowledge of the tech industry. He's interviewed CEOs from some of the world's biggest tech firms, visited their HQs and has appeared on live TV and radio, including Sky News, BBC News, BBC World News, Al Jazeera, LBC and BBC Radio 4. Originally specializing in phones, tablets and wearables, John is now TechRadar's resident automotive expert, reviewing the latest and greatest EVs and PHEVs on the market. John also looks after the day-to-day running of the site.