U.S. Cellular rejected Apple and the iPhone 4S

iphone-4s-missing

Reported in a third quarter earnings call this week, U.S. Cellular CEO Mary Dillon told investors that the company turned down Apple when approached in regards to offering models of the iPhone to U.S. Cellular customers. While Dillon indicated that the U.S. Cellular network was definitely capable of handling the expanded traffic from sales of a new iPhone, Apple’s offer was rejected due to terms that were “unacceptable from a risk and profitability standpoint.” This indicates that Apple may have wanted a large order placed as well as an upfront payment from the cellular company. Apple may have also stipulated a set of conditions around distribution and in-store placement of the iPhones that was unacceptable to U.S. Cellular.

us-cellularWhile U.S. Cellular currently has about six million customers without access to the iPhone, the company certainly isn’t the largest cellular provider without Apple’s popular device. The 34 million subscribers at T-Mobile also don’t have access yet, specifically because Apple hasn’t developed a version of the phone that’s compatible with T-Mobile’s service. While T-Mobile phones certainly operate at 3G and 4G speeds, the 3G service operates on the AWS frequency band which is incompatible with various models of the iPhone. Apple did sign a new agreement with regional cellular provider C Spire which provides approximately 900,000 subscribers with access to the iPhone 4 and 4S starting next Friday.

In addition to the news about the rejection of Apple’s offer, Dillon mentioned that the launch of the LTE network was being delayed until early 2012. Previously, the company had planned to offer LTE access during the fourth quarter of 2011. The initial launch of the LTE network will take place in states such as North Carolina, Iowa, Oklahoma, Maine, North Carolina, Texas and Wisconsin. Plans regarding the launch in additional markets will be announced throughout the year.

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