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Topic Review (Newest First)

  • 06-09-2008, 06:18 PM
    Ron


    http://www.att.com/gen/press-room?pi...rticleid=25791


    San Antonio, Texas, June 9, 2008

    AT&T Inc. (NYSE:T) today announced it will be the exclusive U.S.
    provider of the new iPhone 3G, details of which were outlined earlier
    today at Apple's Worldwide Developer's Conference in San Francisco.

    Under the terms of a new agreement with Apple, AT&T remains the
    exclusive U.S. carrier of the
    iPhone 3G, which will be available beginning July 11 at a starting
    price of $199 with a two-year contract. The iPhone 3G boasts several
    significant enhancements, including:

    * 3G broadband wireless connectivity, which gives customers a home
    broadband-like speed experience when surfing the Internet, sharing
    files and using media-rich Web applications.
    * Business-class capabilities, including e-mail, viewed on a
    large, touch-screen device and designed to meet the needs of companies
    of all sizes.
    * The ability for developers, including AT&T, to create customized
    consumer and business applications using the Apple software
    developer's kit (SDK).

    Customers can get more information on the iPhone 3G at
    www.att.com/iphone.

    AT&T expects that the iPhone 3G's attractive pricing and rich set of
    features including business e-mail and other applications, combined
    with the broadband speeds of AT&T's 3G network, will spur significant
    subscriber and revenue growth particularly in wireless data and
    strengthen AT&T's wireless leadership and long-term growth profile.

    "The iPhone 3G will take mobile communications and computing to a
    whole new level by combining a terrific user interface with a great
    experience accessing the Internet and subscribers' favorite
    applications on our 3G wireless network at unsurpassed speeds," said
    Ralph de la Vega, president and chief executive officer of AT&T
    Mobility. "Combine our high-performance 3G broadband wireless network,
    the new iPhone's business-class capabilities and a starting price of
    $199, and I expect that we will continue to increase revenue per user
    and attract customers who spend the most on wireless. The device is
    built, and priced, to sell."

    AT&T will sell iPhone 3G in more than 2,200 company-owned retail
    stores and kiosks, as well as through its direct business sales teams.

    New Agreement With Apple Reflects Significant Growth Opportunity
    The new agreement between Apple and AT&T eliminates the
    revenue-sharing model under which AT&T shared a portion of monthly
    service revenue with Apple. Under the revised agreement, which is
    consistent with traditional equipment manufacturer-carrier
    arrangements, there is no revenue sharing and both
    iPhone 3G models will be offered at attractive prices to broaden the
    market potential and accelerate subscriber volumes. The phones will be
    offered with a two-year contract and attractive data plans that are
    similar to those offered for other smartphones and PDAs. AT&T
    anticipates that these offers will drive increased sales volumes and
    revenues among high-quality, data-centric customers. Currently, less
    than 20 percent of AT&T's postpaid subscribers have integrated devices
    capable of voice, Web and data applications. Based on the company's
    experience, average monthly revenues per iPhone subscriber are nearly
    double the average of the company's overall subscriber base.

    * With a two-year contract, the price of an 8GB iPhone 3G will be
    $199; the 16GB model will be priced at $299.
    * Unlimited iPhone 3G data plans for consumers will be available
    for $30 a month, in addition to voice plans starting at $39.99 a
    month.
    * Unlimited 3G data plans for business users will be available for
    $45 a month, in addition to a voice plan.

    In the near term, AT&T anticipates that the new agreement will likely
    result in some pressure on margins and earnings, reflecting the costs
    of subsidized device pricing, which, in turn, is expected to drive
    increased subscriber volumes. The company anticipates potential
    dilution to earnings per share (EPS) from this initiative in the $0.10
    to $0.12 range this year and next, with a 2008 adjusted consolidated
    operating income margin of approximately 24 percent and a full-year
    2008 wireless OIBDA margin in the 39-40 percent range. As recurring
    revenue streams build without any further revenue sharing required,
    AT&T expects the initiative to turn accretive in 2010.

    AT&T's 3G Wireless Network
    The iPhone 3G harnesses the power of AT&T's broad and powerful 3G
    mobile broadband network, which offers 3G mobile phones download
    speeds of up to 1.4 Mbps. AT&T's 3G network is currently available in
    280 leading U.S. metropolitan areas; by year-end, the company plans to
    offer 3G service in nearly 350 metro areas. Following the recent
    turndown of its TDMA network, the company is further enhancing its 3G
    network, with improved coverage quality made available through
    reallocated 850 MHz spectrum.

    AT&T's 3G network is the best positioned among American carriers to
    grow in line with customer demand, evolving to next-generation speeds
    incrementally during the next few years. Between 2005 and the end of
    2008, AT&T will have invested more than $20 billion in wireless
    network improvements and upgrades.

    AT&T has the best global coverage of any provider, with voice-roaming
    available in more than 200 countries and data-roaming in more than 145
    countries, including more 3G roaming than any other carrier.

    In addition, the new iPhone 3G will operate in Wi-Fi mode through
    wireless modems in homes and offices, as well as public hot spots.

    Marketing the iPhone to Businesses
    iPhone 3G includes new business capabilities, including access to
    corporate e-mail and intranets, as well as the ability to certify
    mobile business applications to suit the needs of an array of
    industries, ranging from health care and real estate to higher
    education and financial services. Starting July 11, AT&T will begin
    marketing to its business customers, which includes all of the Fortune
    1000. To prepare for the rollout, AT&T will be conducting extensive
    training among its thousands of enterprise and small business sales
    force and customer-support employees. AT&T is the world's leading
    provider of corporate wireless e-mail solutions.

    "We're anticipating significant demand from companies of all sizes
    based on the feedback we've received from the many corporate customers
    who have already purchased the first-generation iPhone, as well as
    from companies waiting for the new iPhone's business applications,"
    said Ron Spears, group president, AT&T Global Business Services.
    "Businesses will benefit from all of the iPhone's new features, as
    well as the ability to maximize productivity by using the combination
    of 3G broadband connectivity and customized applications."

    Through its work over the years with the developer community, AT&T has
    developed a robust catalog of hundreds of enterprise applications
    (www.att.com/choice). AT&T will work with Apple, using the SDK
    process, to enable many of these applications, which today operate on
    other AT&T-powered wireless devices, to also work on the iPhone. The
    growth of mobile applications represents a huge opportunity for
    companies to improve productivity through reduced overhead expenses,
    access to real-time information and higher levels of speed and
    efficiency.

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