AT&T Seeks to Extend Exclusive iPhone Deal
The touch-screen smartphone has been a runaway hit with consumers, and it has poached many customers from rivals T-Mobile (UK) , Verizon Wireless , and Sprint Corp. (NYSE: S). But the exclusive deal reportedly runs out next year, and AT&T wants to extend that until 2011. The deal has given AT&T scores of new subscribers who generate more average revenue per user because of the required data plan, and it could gain millions more this summer if a rumored new iPhone comes out.
The carrier has had to pay a heavy price to be the exclusive provider of the iPhone, though. With the original handset, AT&T was giving Apple a monthly share of revenue from each iPhone customer. The mobile operator dropped that agreement with the release of the iPhone 3G and moved to a more traditional model where AT&T subsidizes the handset by as much as $425 per unit. Additionally, AT&T is not fully happy that it has ceded nearly every aspect of user experience over to Apple, as most iPhone customers only deal with the carrier when they're paying the bill.
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— Marin Perez, InformationWeek