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AT&T CEO: Losing iPhone Exclusivity Not A Concern

May 19th, 2010 05:14 admin Leave a comment Go to comments

iPhone att exclusivity ending not a concern says att ceo

It is now three years since Apple announced its exclusive partnership with AT&T to bring the iPhone to American customers. Apple's terrific success in this period has resulted in a 5000% increase in bandwidth consumption over the AT&T network. This has caused widespread network congestion in recent times. Consequently, a lot of iPhone users have now been demanding an end to Apple's exclusive partnership with AT&T. 

While the agreement between the two companies was apparently signed for a period of five years, it is widely speculated that the exclusivity may actually end this year with the launch of a CDMA iPhone on Verizon. Taiwanese publication DigiTimes had revealed last week that Apple has contracted Pegatron Technology to supply close to 10 million CDMA iPhone units this year.

There is no doubt that ending iPhone's exclusivity on AT&T will help Apple reach more customers. While this is good for consumers in general, there are also concerns that such a move may result in a significant chunk of existing iPhone users moving to the Verizon network resulting in huge losses for Ma Bell.

However, AT&T Wireless CEO Ralph de la Vega allays these fears. According to him, there are a few things that will disincentivize a majority of AT&T customers from fleeing the network. Speaking at the JPMorgan tech conference, de la Vega noted two factors that will help AT&T retain its subscribers:

Family Plans: 70% of AT&T's subscribers today are on family plans. De la Vega noted that moving all the members of a family to a new carrier may be a major disincentive for subscribers.

Corporate Plans: 40% of subscribers are on corporate discount plans. A majority of these users may not be able to financially justify a move to another network.

Ralph de la Vega further pointed out that his company was noticing reduced churn rates (the percentage of subscribers leaving the service) not just among iPhone users, but also among non-iPhone users, which indicates that the carrier's service portfolio played as significant a role in maintaining loyalty among users as the iPhone.

However, AT&T's CEO doesn't seem to consider the possibility of Verizon offering attractive tariff plans that convinces AT&T's iPhone users to switch to Verizon. It will then be interesting to see how AT&T would react to competition. 

Would you switch carriers if AT&T's iPhone exclusivity ends and the iPhone is available on Verizon? 

[via Business Insider]

Source: AT&T CEO: Losing iPhone Exclusivity Not A Concern

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