Steve Jobs wanted to create his own mobile carrier
According to Stanton, he and Jobs spent a considerable amount of time between 2005 and 2007 discussing ideas for Apple to create its own wireless carrier. He said that Jobs "wanted to replace carriers" and that eventually Job's vision became to use unlicensed spectrum (WiFi spectrum) to create a mobile carrier. This way Apple would truly control everything from end to end, not to mention it would have been able to avoid the rash of problems users have had over the years with AT&T.
It's unclear how Apple could have built up a wireless carrier with enough coverage using WiFi in the US alone let alone globally in all of the regions the iPhone has been made available. Perhaps that logistical issue is what led Jobs to kill the idea in 2007. Of course, rumors still continue that Apple or Google may try to buy a carrier like Sprint or T-Mobile in order to disrupt the carrier model from the inside, but as yet, we're still at the mercy of companies like Big Red.