Sorry!! The article you are trying to read is not available now.

How Will AT&T Fare Without iPhone Exclusivity?

Print comment Post Comments
The Atlantic's Daniel Indivglio has some interesting thoughts on AT&T's future.

AT&T reported strong earnings this morning. But, he asks, "What happens when AT&T loses iPhone exclusivity?"

"If you take iPhone exclusivity out of the equation, it will drastically harm wireless growth," he writes. "Of those activations, 24% were new to AT&T. It's very plausible that far fewer of those 1.25 million activations would have switched to AT&T. Without them, AT&T's total activations would have been 15% lower.

"Absent AT&T's exclusivity, many of the current AT&T subscribers that made up the other 76% of iPhone activations would likely have switched carriers as well. Right now, if you like the iPhone, you have no choice but to use AT&T. According to a recent poll of iPhone 4 owners, around 75% expressed frustration with AT&T. So if they wanted to give a Verizon iPhone a try next time, for example, then AT&T's wireless revenue growth would take a major hit."

"In short," Indiviglio says, "much of the best news from AT&T's earnings report is dependent on its iPhone exclusivity."

The one glimmer of hope for AT&T seems to be its U-verse service.

Indiviglio believes that "Frustrated cable users will increasingly consider switching...over the next several years... But it's pretty clear that AT&T's aggressive wireless growth won't continue at anywhere near the same pace when iPhone owners aren't forced to use its network."
POSITION:  No positions in stocks mentioned.