Report: AT&T's iPhone Exclusivity Could End

Interestingly, AT&T apparently doesn't have a problem with this. Over the weekend, the blog HotHardware reported that AT&T is growing tired of dealing with the strain that iPhone users have been putting on its network, and with the ensuing flood of negative feedback that has resulted.

Quoting AT&T insiders, HotHardware reported over the weekend that AT&T's recent moves to support Windows Mobile, Android and webOS-based phones is a sign of the looming end to its iPhone exclusivity, and signals AT&T's desire to allow others to share the brunt of iPhone-related criticism.

One scenario that has been bandied about for months within the Apple blogosphere is that Apple may develop a CDMA version of the iPhone to allow it to run on Verizon's network. Apple hasn't indicated that this is in the cards, but one wireless solution provider doesn't think this would be difficult from an engineering perspective.

"I'm don't know whether or not there would be physical complexities related to the actual size of the chipset and supporting circuitry but, from a communications perspective, it's just a matter of swapping the chipset and plugging in the right driver code," said Joe Bardwell, president and chief scientist of Connect802, a wireless solution provider in San Ramon, Calif.

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AT&T's iPhone exclusivity agreement, which has been in place since the iPhone's launch in June 2007, was a boon to the carrier early on, but AT&T has been dealing with a growing tide of customer complaints in recent months. Dropped calls and poor 3G reception have been most pronounced in New York City and San Francisco, areas with the densest iPhone subscribership.

In December, Ralph de la Vega, chief executive of AT&T Mobility, ignited a firestorm of criticism by suggesting that AT&T may institute usage based pricing for wireless data instead of the flat rate of $30 per month it currently charges.

Although AT&T subscribers believe the carrier hasn't spent enough on upgrading its network to handle the iPhone, some industry figures have come up with alternative, and sometimes controversial explanations. In December, Roger Entner, senior vice president for telecommunications research at Nielsen, claimed the iPhone's poorly designed "air interface," or the electronics that connect the device to cell towers, was negatively affecting both voice and data throughput on the device.

Last week, Gerard Hallaren, director of research at TownHall Investment Research, a Littleton, Colo.-based investment research firm, said AT&T needs to invest about $5 billion in its networks to catch up in terms of performance and coverage with its competitors.