AT&T, iPhone may keep exclusive deal longer

AT&T Inc., the second-largest U.S. mobile-phone carrier, may keep its exclusivity deal for the iPhone longer than expected, putting rival Verizon Wireless at a disadvantage, Credit Suisse Group AG said.

AT&T has a 75 percent chance of keeping the device, made by Apple Inc., through 2011, analysts Jonathan Chaplin and Bill Shope said in a report. That could be 12 to 18 months longer than investors anticipated, as many expected the exclusivity to cease this year, they said.

A delay in getting the iPhone would cost Verizon a chance to win customers and give AT&T more time to correct complaints about its network that might have hurt sales, Chaplin said. Credit Suisse lowered its stock rating on Verizon Communications Inc., which co-owns Verizon Wireless, because of the carrier's diminished chances of selling the smartphone this year.

"It is an iconic device that may well displace other devices as its distribution expands to other carriers," Chaplin said.

AT&T activated 3.1 million iPhones in the fourth quarter, almost two-thirds more than a year earlier. Apple's device accounted for 16 percent of smartphones shipped worldwide in the fourth quarter, up from 11 percent in 2008, according to a report from researcher IDC.

"We don't comment on any of the details of our relationship with Apple, apart from saying we have a great relationship," said Mark Siegel, a spokesman for Dallas-based AT&T. Brenda Raney, a spokeswoman for Verizon Wireless, declined to comment. Natalie Kerris, a spokeswoman for Cupertino, California-based Apple, also declined to comment.

Verizon Communications, based in New York, dropped 56 cents to $28.63 at 4 p.m. in New York Stock Exchange composite trading. AT&T fell 55 cents to $25.03.

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