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AT&T admits likelihood of multiple iPhone carriers

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."




by MacNN Staff

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Comments

  1. c4rlob

    Joined: Dec 1969

    +4

    new exclusive device?

    Has anyone considered AT&T and Apple starting an exclusive contract for an entirely new device while the iPhone 3GS goes multi-carrier?
    As for the network issue...
    it's the usual sorry cop-out for an executive to equate some form of quality to a far more malleable metric like "churn". network quality (good or bad) is not the same as customer turnover. Obviously the two are linked, but to measure technical quality in terms of a completely separate human action is blatantly misleading at best.

  1. jorgem4

    Joined: Dec 1969

    +3

    MMS when ???

    Summer is almost over and no MMS ??? I am really disappointing about this. Any idea when ATT will enable MMS on the iPhone ?

  1. darkrail

    Joined: Dec 1969

    +4

    Low Churn

    I suspect the reason they have record-low churn is because so many of us are unable to leave with our iPhones.

    Where I live, their network is awful. I would churn myself as far away as possible if I could bring my iPhone with me.

  1. slider

    Joined: Dec 1969

    +6

    Well, We'll See

    I just switch to AT&T from Verizon for the iPhone recently. I'd been a Verizon customer for 8-9 years. So here's the thing. There's a lot of griping about AT&T, and it all seems totally warranted - as a quick example: still no MMS and the recent visual VM issue - so it's totally natural to wish for another carrier to have the iPhone. But, as a very recent Verizon customer I can tell you this: Verizon is not exactly the be all and end all of carriers, not even close. There's no guarantee that Verizon will not have similar issues.

    Apple seems to have gotten customers a pretty good deal. Since I was responsible for the taxes on my iPhone (all of it) I was able to calculate that the cost of the iPhone is (32GB) is $799, that means AT&T subsidized $500 (assuming all my assumptions were correct). Then there's the unlimited data plan, the iPhone's pretty useless w/o it. And one thing I'm really loving with AT&T is rollover minutes - you don't get that with Verizon. I bring all of this up b/c competition is touted as beneficial to customers, but in the case of the iPhone, well, I'm not sure how much of a better deal Verizon will offer to get you to switch back to them. So what can we expect if iPhone contracts are more or less the same with pluses and minuses? I'd say reliability would be the obvious answer and that competition will force AT&T to work harder to provide even better service, right?

    I'd offer this, AT&T was already in the hot seat. I doubt that they sat back relaxed since they got this exclusive deal. It was obvious from the start that the iPhone was a huge deal, just look at all the copy cats. So I think AT&T recognized the importance of doing everything it possible could to meet the expectations of the iPhone. If anything, it only speaks to the challenges AT&T faced/faces as a carrier in general.

    I'm not against other carriers getting the iPhone, in fact I think it's great, but I do point to the cliche: the grass is always green on the other side. Well, in my case it was, I wanted and finally got my iPhone, so I should add a prefix the above cliche - "all things being equal.......

  1. Le Flaneur

    Joined: Dec 1969

    +2

    new device

    cr4lob,

    It is far more likely that Apple will release a new device that can work with more than one carrier; already-released iPhones have been bound by contract to AT&T. Perhaps that new device of which a prototype was lost at FoxConn?

  1. cdjoyce

    Joined: Dec 1969

    +2

    churn factor......

    Regarding "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."

    All I can say is, watch out for the "mother of all churns" once Apple makes the iPhone available on other carriers. I for one have not left AT&T ONLY because it's the only iPhone game in town. But once it's not, I'm gone so fast it should make Stephenson's head spin.

  1. mr100percent

    Joined: Dec 1969

    +1

    Verizon

    Verizon was an evil company, and I switched to AT

  1. kdogg73

    Joined: Dec 1969

    +1

    RE: Well, We'll See

    Well said, Mr. Slider.

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