In order to capitalize on the launch of the iPhone, AT&T should offer to pay the early termination costs for customers who leave other carriers (e.g. Verizon, SprintPCS, etc) and sign up for an extended agreement with AT&T. Given AT&T's experience in understanding churn rate plus their knowledge of ARPU (average revenue per unit or subscriber), AT&T should be able to easily put a solid offer together to help bring customers over. Although the iPhone will bring customers into the store, the termination fee consumers will need to absorb to switch to AT&T may impact overall customer acquisition.

This interesting data point was from the WSJ today:

A survey by research firm IDC found that while 60% of respondents were interested in the iPhone, only 10% wanted to pay full price and sign a contract with AT&T.