What will the end to the iPhone exclusivity arrangement mean to AT&T?

What will the end to the iPhone exclusivity arrangement mean to AT&T?

Summary: AT&T has given a hint in its latest 10Q filing to the SEC that the iPhone exclusivity arrangement it has with Apple might be coming to an end soon. What will this mean to the carrier?

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AT&T has given a hint in its latest 10Q filing to the SEC that the iPhone exclusivity arrangement it has with Apple might be coming to an end soon. What will this mean to the carrier?

Here are some of the highlights from the filing:

"Offering a number of attractive handsets on an exclusive basis distinguishes us from our competitors. As these exclusivity arrangements end, we expect to continue to offer such handsets (based on historical industry practice), and we believe our service plan offerings will help to retain our customers by providing incentives not to move to a new carrier."

"Although exclusivity arrangements are important to us, such arrangements may not provide a competitive advantage over time, as the industry continues to introduce new devices and services."

"Also, while the expiration of any of our current exclusivity arrangements could increase churn and reduce postpaid customer additions, we do not expect any such terminations to have a material negative impact on our Wireless segment income, consolidated operating margin or our cash from operations."

It's pretty clear that people don't like AT&T. On top of that, the iPhone has subjected its network to insane data loads which have caused problems that require massive investment to solve. A big reason for that load has been the unlimited data plans that the company offered. In an attempt to put the brakes on users sucking relentlessly on the data teat, AT&T first tried to educate users, before applying the brakes on new users.

But the iPhone is a huge customer magnet for AT&T, with the iPhone 4 drawing in huge numbers of new customers to the network.

So, what will happen once other networks get their hands on the iPhone?

[poll id="546"]

The way I see it, I can't see losing the iPhone being good for AT&T. Given the kind of feedback I've been getting from customers, I'd bet on there being a rapid evaporation of customers.

Topics: Smartphones, Hardware, iPhone, Mobility, AT&T

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34 comments
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  • RE: What will the end to the iPhone exclusivity arrangement mean to AT&T?

    Who said they would lose the iPhone? Losing exclusivity is another matter entirely. They may still be able to sell the iPhone. I hope to goodness Verizon doesn't end up being exclusive. No multi tasking, i.e., being able to talk and access another program at the same time. I had Verizon for a decade and if you want to talk about dictatorial and overpriced, Apple doesn't hold a candle to Verizon. "Can you hear me now?" Sure, but not always clearly and not with a good data plan or ring tones or.....
    dheady@...
    • Sorry man, weak excuse...

      @dheady@... The verizon 4G implementation is going in early next year and addresses this issue (personally it has nevr bothered me).

      As for over priced, I pay far less with verizon and 2 droids for the same seevice AT&T with 2 iPhones would cost me. Believe me, my daughter and her fianc? were paying more without true smart phones and their connection was lame.
      slickjim
      • RE: What will the end to the iPhone exclusivity arrangement mean to AT&T?

        @Peter Perry :not sure why you "paid far less" if you put Verizon's plans next to a&t they are the same on voice and well att is cheaper on data? i work for att and my roommate works for Verizon...we can all live in peace;)

        i guess the over priced part is perception ...i just wanted you to know that they are almost identical prices :)
        jb67871
    • RE: What will the end to the iPhone exclusivity arrangement mean to AT&T?

      @dheady@...
      What? Did you just say no multitasking or good ring tones? Ummm the multitasking depends on the phone not the service lol and ringtones what do you mean you can download or make any ring tone you want for free with any provider...AT&T signal is one of the worse in the industry you sure your not drunk??
      Fletchguy
  • RE: What will the end to the iPhone exclusivity arrangement mean to AT&T?

    One item that continuously gets overlooked and underappreciated is the wifi network that AT&T has put in place. They have, hands down, the largest number of wifi hotspots in the country. This means that at many hotels, starbucks and mcdonalds all over the country, you can use your iPhone or iPad on a better performing network than anybody?s 3G or even 4G network and at no additional cost beyond your AT&T data plan. Verizon and Sprint have nothing comparable.

    I live in the nation?s capitol and love my iPhone and am delighted with AT&T?s service. When we experienced a huge power blackout. I fired up my laptop and conducted a web presentation using my AT&T card and my iPhone. As rated by speedtest.net, my download speed was > 5mb/s. Astonishing! I was able to deliver my presentation to my client without missing a beat or experiencing a dropped call.

    One final thought, it would be interesting to put a Samsung Captivate on AT&T up against a Droid X on Verizon and see how they perform side by side. Then we might have more of an (non)-apples to (non)-apples comparison.

    Finally, AT&T has one of the lowest churn rates in the industry which does not jive with what I believe is an overblown expression of dissatisfaction with the network. I for one, will stick with AT&T regardless of whether Verizon gets it or not. My guess is that by the time the iPhone is availabe on othe networks, it will be a mute point. After all AT&T survived the loss of exclusivity of the Motorola Razor.
    snow53
    • A couple of points here

      @snow53 AT&T has one of the lowest churn rates because Apple has one of the highest rates for repeat customers.

      As for the hot spots, AT&T made them all free so that doesn't even matter.

      Now as for comparison speed, when LTE rolls out AT&T loses any advantage they had and Verizon is still more reliable.
      slickjim
    • RE: What will the end to the iPhone exclusivity arrangement mean to AT&T?

      @snow53
      Yeaahhh um not sure if you know but McDonalds Burger king, Star Bucks and almost any hotel offer free wi fi to anyone on any network so AT&T is irrelevent in your arguement and your right sprint blows AT&T speeds out the water 3G is like dial up compared to 4G sooo your entire statemnt is pointless lol
      Fletchguy
    • RE: What will the end to the iPhone exclusivity arrangement mean to AT&T?

      @snow53: I owned an iPhone 32 GB for two weeks & bought several apps. But I don't live in a big urban area. Despite AT&T's map showing coverage (a) the best I ever got was Edge, and (b) too often I got "no service for even voice. So, despite having waited for several iterations I returned the iPhone and CNXed the AT&T contract because my wonderful device couldn't reliably perform its primary function: making and receiving calls.

      I returned to Verizon that I've had for years with wonderfully reliable phone connectivity. If they get a CDMA iPhone, I'll wait a bit (no first adopter I) to see how it works out. I will miss the video tel calls with my sons who live in highly wired urban areas.
      mmacdona
      • RE: What will the end to the iPhone exclusivity arrangement mean to AT&T?

        @mmacdona Get an HTC Evo or HTC Incredible and you'll be able to do video calling in HD compared to the crappy iphone camera, oh and you dont need wireless.....
        mclairmont
  • It means

    It means the end of AT&T as we know it...

    The sad part is the fact that many studies have been released showing the Apple products were the issue and not the network but iPhone fans don't want to believe that... Of course Apple will fix the antenna issue and make it look like they were never the problem.
    slickjim
  • Good for AT&T

    Why? Let the other networks try to keep up with iphone data usage. See what happens.
    erikswanson
    • RE: What will the end to the iPhone exclusivity arrangement mean to AT&T?

      @erikswanson - Verizon is already more heavily prepared for 3G traffic - at least here in Phoenix and in San Diego. My son can't even get a reasonable CDMA signal in either of those 2 cities with his iPhone let alone a 3G signal. I'm live the whole time with my Droid on Verizon. I think things will be just fine.
      Timpraetor
      • RE: What will the end to the iPhone exclusivity arrangement mean to AT&T?

        @Timpraetor


        Ummm verizon is cdma and AT&T is 3G gsm so what your saying really makes no sense? If you cant get a cdma signal then your droid will not work as its not on a 3G gsm network its on evdo cdma with verizon
        Fletchguy
    • RE: What will the end to the iPhone exclusivity arrangement mean to AT&T?

      @erikswanson
      bk2earth
  • It will not be a major loss

    I will stick with AT&T, Sprint, T-mobile, verizon, and many others are not available in my area, AT&T still has the largest coverage area, plus I save by having phone, direct tv, home phone, dsl and cellular all bundled in one package.
    Teacee
    • RE: What will the end to the iPhone exclusivity arrangement mean to AT&T?

      @Teacee - "[i]available in my area[/i]"

      That's the thing - "in your area." In "my" area, AT&T has very poor support and atrocious customer service. In fact, while I love so many things Apple, AT&T is the reason I DON'T own an iPhone.
      Timpraetor
    • RE: What will the end to the iPhone exclusivity arrangement mean to AT&T?

      @Teacee
      My family was with a Verizon plan for many years while traveling in our RV. Once we settled in the community we now reside in, Sprint and Verizon do not have coverage in this area. Verizon wanted to charge aound $200 for a "booster box," yet others in our community got them free from Sprint rather than lose customers. When I called Verizon to tell them I was porting my numbers and leaving for AT&T there was no compassion, nor any attempts as keeping us as customers. I love my iPhone through AT&T and for the first time in 4 1/2 years I am able to use my cell phone from inside my home! AT&T has my vote. If people leave, they will be back! Sincerely, Sunseeker in Zellwood, FL.
      bk2earth
    • RE: AT&T still has the largest coverage area

      @Teacee

      Yeah, AT&T might have the largest coverage area, until you look at 3G, then they have the SMALLEST area.
      What is their current 4G? Non-existant? Sprint has some up already, and obviously Verizon/Alltel (Some markets still operate under the Alltel name) is to have some next year.

      Oh yeah, one other thing AT&T has the largest of: The Deposit upon a new contract.
      DaemonSlayer
  • RE: What will the end to the iPhone exclusivity arrangement mean to AT&T?

    Get rid of these Smartphones and opt for a prepaid cell phone! Who can afford these 2 year contracts with crazy early termination fees with this out of control economy?!
    rocketman67
  • RE: What will the end to the iPhone exclusivity arrangement mean to AT&T?

    My service is with US Cellular and I am not planning on going anywhere else, but I would lobe for them to get the iPhone...I might try it then, but for mow I am sticking with my HTC smartphone...I Love it.
    razrbackfan