Rumor Mill: AT&T looking for 2G exit strategy

AT&T Mobility is looking for a 2G GSM exit strategy, and will begin pushing more 3G HSDPA phones to customers in an attempt to phase out 2G phones in its portfolio, according to a leaked internal AT&T email.

According to the email, which is dated this past Wednesday, the carrier began lowering prices on 2G phones on Wednesday to increase sell-thru. The email includes a reference timeline for how the process is to proceed, and today an unnamed 3G handset will be designated as free as a replacement device for those with 2G handsets that will presumably be phased out. On Sunday, AT&T managers will be authorized to begin selling the device.

The move may have more to do with simply ridding AT&T's portfolio of older, less expensive 2G handsets than 2G GSM technology itself, since most handsets are backward compatible. It could also be a pure business decision on AT&T's part, since HSDPA handsets are more likely to include data plans, which would boost ARPU.

In the fourth quarter of 2008, wireless data revenue jumped 51.2 percent over the year-ago quarter to $3.1 billion, making it the 12th consecutive quarter with wireless data revenue growth above 50 percent. Data revenue made up 26.6 percent of AT&T's fourth quarter wireless service revenues, up from 19.9 percent in the year-ago quarter.

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