AT&T is in talks with Apple to extend its exclusive U.S. agreement to sell the iPhone from 2010 to 2011. 
Dallas, Texas-based AT&T declined to discuss the terms of its agreement with Apple -- only saying it is a multi-year deal. It said it added 4.3 million iPhone subscribers in the second half of 2008 -- about 40% of whom were new to AT&T.
If the extension is granted, AT&T's grip on the iPhone would span a total of four years.
The company faces challenges trying to keep the iPhone away from its competitors and finding the next hit devices, such as smartphones and multimedia handheld tablets.
AT&T plans to shift its focus away from the struggling U.S. landline phone business and into the wireless market, where technologies evolve quickly and hit products don't last long.
"This business cycle is going to cycle," said Randall Stephenson, AT&T's Chief Executive. "You got to make sure that you're positioned when it cycles back out to be the leader in the industry, and to do that you have to be the leader in mobility, first and foremost."
With or without the iPhone, AT&T plans to invest heavily in wireless to "future proof" the business as new bandwidth-hogging devices come online.
Two-thirds of the company's capital outlays in the next five years will go to wireless-network investments and acquisitions.
Apple has a number of relationships with other wireless carriers who service the iPhone in 80 countries. Those carriers include 02 in the United Kingdom, Softbank in Japan, Orange in France and T-Mobile in Germany.
