• USA Today , Friday, August 1, 2008 11:15 AM

The iPhone is central to what AT&T chairman and CEO Randall Stephenson sees as an ongoing transformation of AT&T into a wireless goliath with global reach and intense customer loyalty. "The iPhone has repositioned AT&T as the premier wireless brand in the world," Stephenson says.

Stephenson championed the idea of paying Apple about $300 per device, analysts estimate, to help hold down the retail cost of the 3G iPhone. At $199, it costs about the same as a high-end cell phone. The subsidy, which replaces another arrangement that gave Apple a portion of iPhone service revenue, will dilute earnings through 2009, AT&T says.

Those who want to surf the mobile Web -- and why else buy an iPhone? - also must buy a data plan. Total cost: around $100 a month. That's almost double the $55 generated by the average AT&T wireless customer. As consumers obtain easy, fast access to the Internet, Stephenson believes, e-commerce will ratchet up significantly, lifting whole economies in the process.

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