AT&T in talks to extend iPhone exclusive through 2011

With AT&T's exclusive agreement to carry Apple's iPhone due to expire next year, sources tell the Wall Street Journal the operator is in talks with the computing giant to extend the deal through 2011. In an interview with the publication, AT&T CEO Randall Stephenson declined to discuss the terms of AT&T's existing agreement with Apple, confirming only that it's a multi-year partnership. But the iPhone's value to AT&T is clear: The company added 4.3 million iPhone subscribers in the second half of 2008, about 40 percent of them new to AT&T. Stephenson tells the Journal he plans to overhaul AT&T's marketing efforts to make wireless its first priority, adding he plans to do away with a restriction mandating customers subscribe to AT&T's home-phone service to qualify for discounts on TV or broadband Internet services. Being a mobile subscriber should be enough, Stephenson said: "We have 77 million wireless customers and 30 million consumer phone lines. Which customer base would you rather work from? We tend to come at this backwards."

An Apple spokesperson declined comment on the iPhone negotiations, saying only "We have a great relationship with AT&T." Stephenson adds that with or without the iPhone, AT&T will invest heavily in wireless in an effort to "future-proof" its business, committing two thirds of the operator's capital expenditures in the next five years to mobile network investments and acquisitions. Since Stephenson took over AT&T from former CEO Ed Whitacre two years ago, the firm has invested $18.8 billion to acquire spectrum and smaller wireless operators, and has spent upwards of $1.3 billion on iPhone discounts.

For more on the AT&T/Apple talks:
- read this Wall Street Journal article

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