AT&T Inc. Wednesday said that it activated more than 1.6 million iPhones in the first quarter, one reason the company's net income didn't fall even more than the 9% it reported.The telecommunications firm said it had boosted its wireless subscriber base by 1.2 million during the first three months of 2009, more than half of them new customers brought to its network by the iPhone 3G. More than 40% of the 1.6 million new iPhone activations were customers previously not with AT&T. AT&T also trumpeted the iPhone's contribution to its longer-term standing, claiming that its iPhone subscribers generate an average monthly revenue per subscriber (ARPU) that's 1.6 times higher than the company's overall subscriber base. The "churn" rate -- the rate at which subscribers fall away and are replaced -- is also significantly less for iPhone owners, the company said. That's not surprising: AT&T has an exclusive with Apple in the U.S., and is the only mobile carrier authorized to sell the iPhone and provide service. "I am particularly pleased with the success of our iPhone 3G initiative, which has driven strong high-end customer growth and delivered financial benefits ahead of our original outlook," Randall Stephenson, AT&T chairman and CEO, said in a statement early Wednesday. AT&T's lock on the iPhone in the U.S. ends in June 2010, according to reports last week, but the company is negotiating to extend the deal at least another year. Analysts, however, have questioned whether Apple is as eager to stay with AT&T only. "My understanding when the iPhone first came out was that AT&T had a three-year exclusive, with an option to renew for two more years," said Brian Marshall, an analyst at Broadpoint AmTech. "But I'm not so sure that Apple wants to." Marshall, who has estimated that Apple will announce later today that it sold 3.15 million iPhones in the first quarter, today said the AT&T numbers were even better than those he had figured into his calculations. "The AT&T activation number of 1.6 million was 30% ahead of my expectations of 1.2 million," Marshall. "That's a very positive data point and gives me more conviction in my Street-high numbers for [the first quarter]." Typically, AT&T sales account for about 40% of Apple's total iPhone shipments during a quarter, Marshall said. If that holds true, Apple's iPhone sales would be approximately 4 million. AT&T's revenue of US$30.6 billion for the quarter was down less than 1% from the $3.07 billion it reported during the same period in 2008, the company said today in its earnings statement, while net income fell 9%, down from 2008's $3.5 billion to this year's $3.2 billion. Wireless data revenue, however, was up 39% year-over-year, said AT&T.