AT&T: Losing iPhone exclusivity won't dent wireless earnings

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AT&T Mobility (NYSE:T) does not expect a "material negative impact" from the end of handset exclusivity agreements including for Apple's (NASDAQ:AAPL) popular iPhone, according to a filing the company made with regulators.

According to a filing with the Securities and Exchange Commission, the carrier said it does not expect the loss of such agreements to hurt its wireless earnings. The comments made in the lengthy filing largely echo ones made by AT&T Mobility CEO Ralph de la Vega earlier this year. Nevertheless, they represent the first time the carrier has addressed handset exclusivity deals in an SEC filing, fueling increased speculation that AT&T's deal with Apple is nearing an end.

"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," the company said. AT&T explained that 80 percent of the company's subscribers are either on family-talk plans or business-discount plans, making them less likely to churn. That largely reflects the view de la Vega put forward in May, when he called those kinds of subscribers "sticky."

AT&T activated 3.2 million iPhones in the quarter, its largest number of quarterly iPhone activations ever. The carrier said around 27 percent of those activations were customers new to AT&T. The iPhone surge clearly helped fuel AT&T's growth; the company added a net 1.6 million subscribers in the quarter.

Apple and AT&T have said they have a strong relationship, but that has not stopped speculation that the iPhone may soon land at rival Verizon Wireless (NYSE:VZ) early next year. A fresh rumor on the topic from TechCrunch indicates that Apple has ordered millions of Qualcomm (NASDAQ:QCOM) CDMA chipsets for a Verizon iPhone, due out in January. That fits with a recent report by Bloomberg, which pegged a Verizon iPhone to launch in January. A Verizon spokeswoman declined to comment and an Apple spokeswoman did not immediately respond to a request for comment. 

For more:
- see this WSJ article (sub. req.)
- see this Engadget post
- see this TechCrunch post

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