updated 04:00 pm EDT, Thu July 23, 2009
ATT on US iPhone carriers
AT&T is unlikely to hold onto its position as the only American iPhone carrier, the company's CEO has acknowledged. "There will be a day when you are not exclusive with the iPhone," said Randall Stephenson, speaking at a Fortune technology conference Thursday. The issue is now thought to be critical for AT&T, whose profits have become heavily dependent on the iPhone. One analysis suggests that AT&T customer additions could shrink to a fraction of previous sizes without Apple's handheld.
Although Stephenson describes AT&T's deal with Apple as working "really, really well," the carrier is set to lose its exclusivity in 2010 should it not be able negotiate a second contract. It is believed that both AT&T and Verizon are now negotiating with Apple for iPhone rights, even if a Verizon model might arrive as late as 2011 in order to accommodate LTE (4G) networking.
Stephenson does complain that subsidizing the iPhone 3GS is an extremely costly proposition, but at the same time comments that iPhone customers pay greater fees while remaining tied to AT&T. A more significant source of concern is thought to be poor network quality. "There's no greater cause of churn than network quality," says the executive, defending AT&T by noting the "lowest churn in the company's history."