AT&T Cuts IPhone 3GS Price, Making Way for New Phones

AT&T Inc., the second-largest U.S. mobile-phone carrier, is cutting by half the price of the Apple Inc. iPhone 3GS, making way for a lineup of handsets designed for its faster network due later this year.

The reduction in price, to $49 from $99 for users on contracts, takes effect tomorrow, Mark Siegel, a spokesman for Dallas-based AT&T, said in an e-mailed statement.

AT&T said yesterday that it plans to introduce 20 devices this year for its next-generation mobile network. The new products are aimed at helping the company catch rivals Verizon Wireless and Sprint Nextel Corp. in starting so-called 4G service. AT&T is also eager to keep customers after it loses its status as the sole U.S. provider of Apple’s iPhone.

The company unveiled fourth-generation smartphones from Samsung Electronics Co., HTC Corp. and Motorola Mobility Holdings Inc. yesterday at a developer conference in Las Vegas. All three phones run Google Inc.’s Android software.

The carrier is accelerating plans to build a fourth-generation network using the long-term-evolution standard after larger rival Verizon Wireless started offering LTE services late last year. AT&T said it will begin selling LTE service by the middle of 2011 and will largely complete its rollout by 2013.

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AT&T is also stepping up its dependence on Android devices as its exclusive hold on Apple’s iPhone nears its end. Verizon will start to offer the iPhone to its customers this year, people familiar with the plan said last year.

AT&T includes a faster version of its 3G service, called HSPA+, in its definition of 4G. The company will release phones and tablets for LTE in the second half of 2011.

Demand for the iPhone has helped offset declining revenue from land-line services and slowing wireless growth. Carriers are competing for mobile customers as the market becomes more saturated and wireless voice sales decline. There are enough wireless devices for 93 percent of the population, according to the CTIA wireless industry association.

AT&T fell 40 cents to $29.15 at 4 p.m. in New York Stock Exchange composite trading. The shares gained 4.8 percent last year.