America’s No 2 mobile service provider AT&T Inc will cut the price of older iPhone 3GS model by half to $49 from $99 from January 7 even as it is widely expected to lose its exclusive US rights to sell Apple Inc smart phones.

Verizon Wireless, a venture of Verizon Communications and Vodafone Group Plc, which are bigger rivals of AT&T expects to start selling a version of iPhone soon.

However, AT&T said the price of iPhone 3GS in Apple stores will be determined by Apple itself.

The price cut follows AT&T’s announcement on Wednesday at the Consumer Electronics show that it is planning to sell 20 new high-speed wireless smart phones in 2011 to reduce its dependence on Apple.

iPhone 3GS hit the stores in the summer of 2009.