Analyst: Apple Likely to Extend AT&T’s Exclusive iPhone Deal

Posted under Editorials on Monday, 14 September 2009 by john

iSuppli recently published a report in which it predicts that Apple will extend its exclusive deal with AT&T next year.

This is contrary to the reports which indicate that Apple might add new iPhone carriers in the US within a year, thus ending AT&T’s three year exclusive deal for the iPhone in the US.

iSuppli prediction is based on the anticipated growth of High Speed Packet Access (HSPA) technology being adopted by AT&T. According to the report, HSPA will have 1.4 billion subscribers by 2012, while competing standard EVDO, used by Verizon, will have only 304.6 million users by 2013.

According to Francis Sideco, principal analyst, wireless communications at iSuppli:

“Speculation is rife that Apple will end its exclusive U.S. iPhone service deal with AT&T when the current contract expires in June 2010 and begin to offer phones that work with the Verizon network.
However, iSuppli doesn’t believe this will be the case.”

But iSuppli has questioned whether extending the contract with Apple would be a good idea for AT&T. According to them the iPhone has been a “mixed blessing” for the wireless carrier, it has brought new subscribers but has also resulted in overloading their network as iPhone users tend to download more apps, stream music and videos and surf the web a lot more than an average smartphone user.

Jagdish Rebello, director and principal analyst added:

“Facing dropped calls, service interruptions and slow download speeds, iPhone users in certain markets are blaming AT&T. iPhone users are overloading AT&T’s network with data traffic generated by the download and usage of apps. However, the real problem is that AT&T has not found a way to monetize data traffic generated by the iPhone.”

Last week, AT&T published a video featuring Seth Bloom a.k.a “Seth the Blogger Guy”, which explains the reason for delaying the launch of the MMS feature even though it was available in iPhone OS 3.0 and the issues they are facing due to the dramatic increase in smartphone usage in the past few years and how they plan to address the problems.

The extension of the exclusive iPhone deal might also explain why AT&T is planning to spend $17-18 billion dollars this year to expand its 3G broadband network by adding high quality 850 Mhz spectrum in major markets.

Let us know your thoughts in the comments section below.

[via AppleInsider]