RIM: Could it Get Worse? Now under Pressure to cut Carrier Fees

The Blackberry manufacturer Research In Motion Limited (TSE:RIM) (NASDAQ:RIMM), has been under a lot of pressure the last few weeks. The company released worse than expected first quarter losses, plans to lay-off 5000 employees and a 33% decrease in profits when compared to the last quarter. Moreover, the release of BlackBerry 10, previously scheduled for this year, was delayed till the first quarter of 2013.

To add fresh wounds to Research In Motion Limited (TSE:RIM) (NASDAQ:RIMM)’s already troubled business, the company is now under huge pressure to cut down on the carrier fees that customers like AT&T Inc. (NYSE:T) have to pay. If RIM agrees to decrease the carrier fees, it will result in a 17-18% loss in revenues that the company generates from the fees.

The fees that Motion Limited (TSE:RIM) (NASDAQ:RIMM) charges basically gives carriers like, AT&T Inc. (NYSE:T)  and Verizon Communications Inc. (NYSE:VZ), BCE Inc. and Rogers Communications Inc.,  access to the server infrastructure of Blackberry. These carrier companies in turn face pressure from customers’ that request reduced monthly charges.

RIM’s stock is been down 19% since the earnings report and 95% from the mid 2008. The rumors that the company is looking at spinning off its units and partnering with Microsoft Corporation (NASDAQ:MST) have been circulating for a while now. The BlackBerry maker is looking at all options, as recently stated by Heins, RIM’s CEO in an interview to CBC (Canadian Broadcasting Corp) radio. Heins also insisted that the company is not on a death spiral and is working through a major transition.

The Blackberry maker is banking and has strong hopes that it would turn the tide in its favor. It is also growing in emerging markets like India, Indonesia and South Africa. In many of those countries, Blackberry is growing. The BB manufacturer’s global subscriber clientele is now above 78 million people in over 175 countries.