AT&T Said to Agree to Offer Microsoft Handset Software at Debut

AT&T Inc., the largest U.S. phone company, will sell Microsoft Corp.’s Windows Phone 7 handset operating system when it makes its U.S. debut later this year, according to two people with knowledge of the arrangement.

AT&T will offer the operating system on three devices when it is introduced, said one of the people, who declined to be identified because the plans aren’t yet public. A Verizon Wireless spokeswoman, Brenda Raney, said the carrier won’t offer the software until at least next year.

Microsoft overhauled its mobile-phone operating system to stem market-share losses to Apple Inc.’s iPhone and handsets with Google Inc.’s Android software. Microsoft said it opted not to do a CDMA version of the program until next year, meaning Verizon and Sprint Nextel Corp. phones will have to wait because their networks use that technology.

“In developing Windows Phone 7, we are placing high- quality customer experiences above all else,” Greg Sullivan, a senior product manager at Redmond, Washington-based Microsoft, said in a statement. Microsoft chose to deliver a system for the GSM standard first and a CDMA version in the first half of 2011, he said.

The GSM technology is used by AT&T and Deutsche Telekom AG’s T-Mobile USA unit. Sullivan didn’t say which GSM carriers will sell the phones at its debut.

GSM Carriers

Mark Siegel, an AT&T spokesman, declined to comment yesterday in an interview.

Cara Walker, a spokeswoman for T-Mobile USA, and Cristi Allen, a Sprint spokeswoman, both declined in e-mails to say when they expected to have devices with Windows Phone 7.

AT&T offers Apple’s iPhone and iPad tablet computers exclusively on its U.S. network, and sells smartphones using Android software such as the Samsung Electronics Co. Captivate.

Microsoft and Verizon Wireless’s most recent mobile collaboration on Microsoft’s Kin ended in June when the software maker pulled the phone after two months because of disappointing sales.

AT&T, based in Dallas, rose 6 cents to $28.17 at 4 p.m. in New York Stock Exchange composite trading and Microsoft fell 11 cents to $25.22 on the Nasdaq Stock Market.

Verizon, based in Basking Ridge, New Jersey, is co-owned by Verizon Communications Inc. and Vodafone Group Plc.

Cnet reported Microsoft’s decision to defer the CDMA, or code division multiple access, version of the Windows Phone 7 software last night.

To contact the reporters on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net;Dina Bass in Seattle at dbass2@bloomberg.netdbasswn:LINK>2@bloomberg.net

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