Thomas Gryta

AT&T will be the exclusive carrier for Amazon.com 's new smartphone, which is expected to be unveiled soon, according to people familiar with the plans.

The arrangement extends Amazon's relationship with AT&T, which also provides wireless service to Kindle tablets and e-readers. The move could help AT&T attract new subscribers at a time of intense competition among wireless carriers. Apple and Samsung Electronics have a tight grip on the smartphone market in the US with a combined 60% share in the first quarter, according to comScore.

Rival devices from makers like BlackBerry and Nokia have seen their market share shrivel as they failed to keep up with technology. Amazon hopes to distinguish its phone in a crowded market with a screen capable of displaying seemingly three-dimensional images without special glasses, according to a Wall Street Journal article citing people briefed on the plans.

The phone would employ retina-tracking technology embedded in four front-facing cameras, or sensors, to make some images appear to be 3-D, similar to a hologram, according to the story. Amazon is expected to introduce the device at an event in hometown Seattle and has demonstrated versions of the handset to developers in San Francisco and Seattle.

When AT&T approached Wall Street about its plan years ago to buy T-Mobile, it shocked bankers with the amount of work it had already done.

"When we got their materials, you sort of threw up your hands and said, 'OK, so what are we going to do on this?'" said one banker who advised on the failed attempt.

The work was the product of AT&T's internal merger team, a group of about 20 people that the company has turned to again and again as it built itself up from a Midwestern regional carrier into the country's largest telecom by revenue. Now, the team is active again with talks to buy satellite-television provider DirecTV in a deal that could be valued at nearly $50 billion, people familiar with the matter said.

Working through such options falls in large part to a deal team that is unusually powerful within the company and unusually independent when it comes to working with Wall Street. The group has completed more than a quarter of a trillion dollars in acquisitions over the past two decades, including debt, according to data from Dealogic.

The team also weighs in on key business decisions. It was called in to review AT&T's initial deal with Apple to carry the iPhone, giving a crucial thumbs-up to the unusual agreement, a person close to the decision said. Its leader, Rick Moore, is present at most AT&T board meetings, other people familiar with the matter said.

Competition in the US wireless market has increased, but so have Americans' overall phone bills.

While carriers have trimmed the price of their plans here and there in recent months, billings per user continue to grow amid a shift to smartphones and a surge in wireless Internet use.

The results call into question the notion of a price war in the US market. Rather than aggressively compete outright on price, carriers are tailoring their moves to accomplish other goals as well, like weaning customers off expensive smartphone subsidies and encouraging them to use more data. T-Mobile US raised the cost of its core unlimited data plan. The carrier says it has been competing more effectively by doing away with subscriber "pain points" like service contracts and international data fees. But its executives have also been signaling that they don't plan to start a price war.

"When you really analyze a lot of the pricing moves that have been made, there has not been a significant repricing," Chief Financial Officer Braxton Carter said. To be sure, subscribers can find deals that weren't available before. AT&T said it will cut the price of plans offering unlimited voice and text with two gigabytes of wireless Internet use by $15. A subscriber who brings or buys his own phone can pay as little as $65 a month, about 19% less than previously.

[March 10]