AT&T exec implies iPhone exclusivity in U.S. to end

De la Vega offers no details, says AT&T has a good backup portfolio

AT&T Mobility CEO Ralph de la Vega strongly implied today that the carrier's exclusive deal to sell the iPhone in the U.S. is ending, although he gave no details in a conference call with analysts.

Asked in a question-and-answer session what AT&T plans to do should the exclusive deal come to an end as has been rumored, de la Vega said the iPhone is a good source of new subscribers, but is only part of a smartphone portfolio that gives good results.

"We have a legacy of having a great portfolio...that will continue after the iPhone is no longer exclusive to us," de la Vega said. "We think we will continue after the iPhone...to drive [results]...."

De la Vega said that while the iPhone has been a "good source of new gross [subscribers] for us," the new subscribers from the iPhone in the third quarter was only one-third of the total from all devices.

AT&T is thought to be losing the exclusive iPhone deal it has had in the U.S. for more than two years, possibly to competitor Verizon Wireless. Many believe the deal will expire in mid-2010.

Later in the call, de la Vega added, "we feel really good about our non-iPhone [subscriber] adds and net adds.... We feel really strong about our portfolio in quick messaging devices, including BlackBerry and all the smartphones."

De la Vega, who heads up the wireless unit at AT&T Inc. called AT&T Mobility, said the carrier will continue to offer a distinction from network competitors because AT&T's network can allow devices to simultaneously perform voice and data functions. "Some operators can use voice or data but not at the same time," he said. "What we have in our portfolio is a smashing set of products to come out to exploit that [simultaneous voice and data] capability to differentiate us and also with [network] speed.

"Even if we lose exclusivity [of the iPhone], we will be the only carrier with HSPA 7.2 [a network specification being deployed at AT&T] and [new devices] will work on our network faster," de la Vega said. "I feel as strongly as ever [about] the capability of devices in our lineup and [am] super-excited about the deals with e-readers and personal navigation devices. "

De la Vega also said AT&T is now working with device manufacturers to build Android phones that will "work best" on the AT&T network. "They are terrific devices and much better on AT&T than on anybody else's network."

Still, de la Vega conceded that iPhone has been good to AT&T, noting in his official presentation that the carrier activated a record number of iPhones in the third quarter, totaling 3.2 million in all, or about 43% of what Apple Inc. said were the 7.4 million sold globally in the last quarter.

Regarding the iPhone, de la Vega called it the best for ease-of-use by customers and seemed to offer a note of thanks to Apple after a good run with AT&T. "We spend an awful lot of time looking for the next great device and the next great technologies, and we think iPhone has set the bar.... All the manufacturers are figuring out how to get close, but iPhone is still the best in the world at this point.

"I never understated the capability that Apple has...," he continued. "It's all about making it simple for customers to use the services. Others will try to emulate them, but that device by far is the best in terms of ease of use."

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