Bloomberg News

Carlos Slim Shows Users How to Switch IPhones Away From AT&T

February 07, 2012

Feb. 3 (Bloomberg) -- Billionaire Carlos Slim’s U.S. mobile-phone carrier is instructing users how to switch their iPhones from AT&T Inc. to his prepaid calling plans.

The site for Slim’s Straight Talk service, sold through Wal-Mart Stores Inc., directs users of the Apple Inc. device who have trouble switching away from AT&T to a website that provides instructions. AT&T has a 9 percent stake in Straight Talk’s parent, America Movil SAB, and has members on the board of Slim’s wireless carrier.

America Movil, the biggest U.S. prepaid wireless carrier, is using Straight Talk plans with smartphones to attract users from Verizon Wireless and AT&T. The iPhone instructions are part of Straight Talk’s plan to begin in the next 30 days to offer small chip cards, known as SIM, that users can insert into phones bought from retailers, AT&T or T-Mobile USA, said Walter Piecyk, a BTIG Inc. analyst in New York.

“There is certainly a healthy inventory of used iPhones that consumers can buy at a low cost on EBay, but we believe Straight Talk’s new rate plan could also attract consumers using brand new iPhones,” Piecyk said in a research note today noting the switching instructions.

AT&T sells the iPhone and other smartphones at a loss to get customers to sign up for contracts that typically run for two years. To try to prevent customers from leaving during that period, AT&T “locks” the phones using software so that they only work on its own network. Many other carriers also use the same strategy.

An official of Mexico City-based America Movil who can’t be named under company policy declined to comment, as did Ashley Zandy, a spokeswoman for Dallas-based AT&T. Kristin Huguet, an Apple spokeswoman, didn’t immediately return a phone message. Officials of Wal-Mart couldn’t immediately be reached.

--Editors: Ville Heiskanen, Jeffrey Tannenbaum

To contact the reporters on this story: Crayton Harrison in Mexico City at tharrison5@bloomberg.net; Scott Moritz in New York at smoritz6@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net


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