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AT&T activates record 3.2M iPhones, says exclusivity could end


AT&T reported its third-quarter results Thursday, recording 3.2 million iPhone activations and adding 4.3 million postpaid 3G devices, but the company's CEO also admitted that the iPhone won't be exclusive forever.

AT&T reported a 2 million increase in total wireless subscribers, which was the highest third-quarter gain in company history. The nation's second-largest wireless carrier now has 81.6 million subscribers.

Of the 3.2 million iPhone activations, nearly 40 percent were customers who were new to AT&T.

The Dallas, Tex., company reported $0.54 diluted earnings per share, down slightly from the $0.55 recorded in the quarter one year prior. Average monthly revenues per subscriber increased 3.8 percent year-over-year, and represented the seventh consecutive quarter with a year-over-year increase in postpaid ARPU.

While the strength of the iPhone helped AT&T beat profit expectations on Wall Street, the company's CEO admitted Thursday that AT&T will not have exclusive access to Apple's handset forever. According to Macworld, Ralph de la Vega said during a question-and-answer session that he believes his company's portfolio will survive after the iPhone moves to other carriers.

"We have a legacy of having a great portfolio... that will continue after the iPhone is no longer exclusive to us," de la Vega said. "We think we will continue after the iPhone... to drive (results)."

He went on to note that new subscribers from the iPhone amounted to one-third the total from all devices. He noted that the company's continued roll-out of High Speed Packet Access 7.2 technology in a half-dozen cities by year's end will put it in a strong position going forward.

"Even if we lose exclusivity, we will be the only carrier with HSPA 7.2 and (new devices) will work on our network faster," de la Vega said. “I feel as strongly as ever (about the capability of devices in our lineup."

In recent months, Apple's one-carrier-per-country arrangements have begun to fade away, with multi-company agreements reached in the U.K.. Earlier this month, two wireless carriers in Canada confirmed they would carry the iPhone as well. And Apple's agreement with China Unicom to sell the iPhone is non-exclusive as the handset maker hopes to strike a second deal with China Mobile.

Numerous reports have suggested that Apple could jump to competitor Verizon in the U.S. when the exclusive agreement with AT&T concludes in 2010. However, Verizon's recently announced partnership with Google Android and Apple spoofing ads of late have cooled that speculation.