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AT&T on iPhone: 'exclusive arrangements end'

updated 11:40 am EST, Tue December 7, 2010

ATT CFO reiterates that iPhone exclusive is ending

AT&T today reiterated increasing clues that the iPhone's US exclusivity deal was coming to an end. CFO Richard Lindner at the UBS Media and Communications Conference on Tuesday stressed that there was no such thing as a permanent exclusive and that the company had a diversity of phones to pick. "Exclusive arrangements end," he said.

He didn't provide details, but it's now considered increasingly likely that AT&T's exclusive will end at the start of 2011 and lead to a Verizon iPhone deal soon afterwards. Few clues have been official, but AT&T dropped possible clues when it roughly doubled cancellation fees and extended upgrade eligibility to include all of 2010. The combined gestures would get more subscribers on to new, two-year contracts or else make it difficult for recent customers to switch.

Lindner also brought up the subject of tiered pricing on smartphones and acknowledged that capping data was one of the more "difficult decisions" AT&T had to make. AT&T knew that most customers would prefer unlimited, but he claimed that the 2GB cap was needed to keep use in check. He added that the tiering could change and could bring in more tiers as apps changed the typical data usage.

About seven million subscribers are already using the capped plans, the CFO said. Some deliberately dropped from $30 unlimited to $25 capped and potentially lowered AT&T's average data revenue, but the $15 tier was "very successful" and got some to sign up for data where they wouldn't have done so before.

Lindner wouldn't say how much data iPhone users were consuming each month compared to the 400MB-plus of Verizon's Android users, but he did note that iPad behavior was closer to that of an iPhone than a notebook. Putting a 2GB ceiling on iPad owners didn't directly change their behavior, but many of them were "incented" to use Wi-Fi more often with the change.

Wired Internet access wouldn't necessarily join wireless. It might happen in time, but it would depend on how network usage grew and might not happen at all. There's a "different cost dynamic" at work with wired versus wireless, he said. Cellular access has a limited amount of wireless spectrum and couldn't take on the existing workload of DSL.

by MacNN Staff



  1. climacs

    Joined: Dec 1969


    only staying with AT+T

    because I got grandfathered, I spoke to an AT+T person, apparently I am eligible for unlimited data at $30/mth for as long as I have an AT+T account. Even after my contract lapses and I go month-to-month.

    Unlimited data is pretty awesome for me, I listen to lots of live streaming audio while away from the home and workplace. Streaming audio will eat up a lot of your monthly allotment of data if you are limited to X GB/mth.

    Other than that... not at all surprised that their 'exclusive' arrangement is ending. AT+T just hasn't stepped up and is clearly the weakest link.

    I must say I have mostly not had the issues with dropped calls like many report. Though sometimes at my home, the phone never rings but 15 min. later there's voicemail waiting for me.

  1. prl99

    Joined: Dec 1969


    Verizon data usage

    Has anyone done a study on how much data actually passes through the Verizon network and how it's handling it? Supposed coverage is one thing but have Android phones put enough pressure on Verizon's system to task it as much as iPhone have on AT&T's?

  1. Paul Huang

    Joined: Dec 1969


    Verizon is just better, but still ghetto compared

    The US has the worst mobile phone service in the whole world. The number-one factor is the lack of density and the provider's #1 goal of profit (rather than quality or a good balance of both).

  1. canonsucks

    Joined: Dec 1969


    The only cell provider who can keep up with Apple. likely going to be Apple.

    Sorry, but I just don't see how any of the carriers can, in the long term, keep up with Apple's product update cycle, increasing dependence on data plans and, of course, their rules.

    AT&T did a pretty decent job early on, but likely saw it couldn't keep step with the pace of growth, and the increasing demands placed on its network by the iPhone and iPad, to continue this relationship.

    Time to hand off the exclusivity reigns to someone else and let them field the iBurden that is Apple.

  1. finalsortie

    Joined: Dec 1969


    There never was any talk of permanent exclusivity

    from day one, Apple and AT&T agreed that their exclusive contract will end in around five years. Nor is AT&T going to drop iPhone/iPad support, as it's become too much of an asset for them to abandon Apple.

    I for one was a Cingular customer before it became AT&T, and have had very few issues with their cellular service. (Excluding Customer Service, but even that has gotten a little better.) Therefore, I have no inclination of switching now.

  1. jscottk

    Joined: Dec 1969


    Cheap data = more sign-ups?

    Since having a data plan is absolutely mandatory when buying and using an iPhone in the US, how exactly does a $15 data plan get "some to sign up for data where they wouldn't have done so before?" If there's a way of getting a legitimate/legal iPhone in the US, WITHOUT paying for data plan, I'd sure love to here about it!

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