In a Mistake by Apple, Regional Provider C Spire to Sell the iPhone 4S

In a surprising move, Apple has announced that C Spire Wireless, the eighth largest phone provider in the country, will soon start selling the iPhone 4S. At a time when all major phone companies are eagerly seeking to sell Apple’s newest mobile product, the announcement comes as a snub to larger providers such as U.S. Cellular, which does not yet have access to the iPhone 4S.

C Spire Wireless, formerly named Cellular South, is a Mississippi based company with about 1 million subscribers. Founded in 1988, the company has grown slowly but surely over the years by expanding outside of its home state and by making a few strategic acquisitions. In 2009, for example, its purchase of Corr Wireless allowed C Spire to expand in Alabama and Georgia. The company, however, is still far from a national carrier. Its name change from Cellular South, made just last month, reflects its desire to move outside of the South and establish itself more on the national stage.

This desire is unlikely to be fulfilled anytime soon. While C Spire provides plans ranging from Prepaid Cell Phonesto unlimited data plans, and although it has invested considerably in its wireless network, the company has virtually no network outside of the South. Moreover, even within that region the network is noted by commentators and consumers as perpetually unreliable. C Spire’s best chance of becoming more nationally relevant would be through a successful partnership with LightSquared, which is currently mired in regulatory issues. Without its assistance, C Spire will be able to provide little more than a limited, regional coverage. Instead of wasting resources on the iPhone, the company may be better served by sticking to its small-scale, lower-budget model.

All of which begs the question:  why is Apple allowing C Spire to carry its new phone? There are a couple possibilities. It’s been well reported that Apple seeks to sell cheaper iPhones to lower budget markets, and the company is certainly looking to saturate U.S. markets where it is currently less dominate – such as in the South. But even if C Spire can help out in this regard, any added benefits could be easily offset by customers unhappy with coverage and service, and a subsequent tarnishing of the Apple brand in the South as a result. Ultimately, it seems, C Spire is using Apple to try to go mainstream and Apple is using C Spire to try to expand its reach towards the market’s periphery. Sometimes a partnership like this works. But this time, however, a mutually-beneficial outcome is hard to envision.