Final deadline looms on AT&T, O2, iPhone deal as hostile networks bid for glory

iPhone exclusivity will end – the only question is which network you want to run your Apple mobile on.

There’s big battle between mobile networks in the UK, and network coverage is key to this. It’s why so many people involved in running the UK’s many outdoor music festivals turn to Vodafone or Orange because both networks are thought to offer more effective coverage.

There’s nothing worse than SMS messages arriving 12 hours late, or dropped calls when you’re trying to get a band into Glastonbury festival. Just because it’s a festival doesn’t mean you’re not organised.

This is why AT&T CEO Randall Stephenson set tongues wagging last night when he revealed that “there will be a day when you are not exclusive with the iPhone.”

Stephenson was speaking at Fortune’s Brainstorm Tech conference following AT&T’s publication of its financial results this week.

It’s believed AT&T’s deal for iPhone exclusivity in the US is up for review next year. The CEO seems happy with the arrangement so far, saying AT&T’s deal with Apple is working "really, really well.” However, he does concede that network quality is the biggest reason people switch to different carriers. (Or jailbreak their phones).

iPhone exclusivity also means AT&T attracted 1.4 million new subscribers in its just gone quarter, and shifted 2.4 million iPhones – over a third to new customers. However, the company also concedes the subsidy required for the iPhone does impact overall profitability,but sees it as a trade-off for growing market share. In any case, iPhone users use and pay for more for data than those using any other smartphone.

That’s why Verizon is probably in talks with Apple to offer the (a CDMA version of) iPhone on its network. And it’s not just Verizon.

In the UK, The Guardian this morning informs that Vodafone is wooing Cupertino in an attempt to win the device for its network.

Andy Halford, chief financial officer of Vodafone said the network – which sells the device in 11 countries now – would be keen to offer it in more territories: "It’s a good product and we would love to have it in the portfolio in more countries," he said.

This follows weeks of speculation that Orange and T-Mobile also want in on the deal. T-Mobile even buys iPhones abroad in order to sell them to O2 defectors.

With a million iPhones sold in the UK at this point, and the need to be tied to O2 one of the biggest stumbling blocks for some potential iPhone users, it makes some sense for Apple to consider widening the addressable market in hitherto “exclusive” areas.

An iPhone could even become useful at big outdoor music festivals if the network it was on had better rural coverage, and you owned one of the truly impressive FreeLoader Solar Chargers, of course. (The Freeloader being the best portable solar charger we’ve looked at so far, BTW).

In any case, given the pending DOJ antitrust investigation into iPhone exclusivity, Apple may have to completely abandon the exclusive arrangements it reached when negotiating its initial agreements to launch the iPhone in various countries.

Just look at Canada to see the preparations being made by other carriers there….