DALLAS ( TheStreet) -- AT&T ( T - Get Report), entering what could be a challenging few months, just announced its first smartphone powered by Google's ( GOOG) Android operating system.

On March 7, AT&T will start selling Motorola's ( MOT) new Backflip phone. The smartphone, Motorola's fifth Android device, features a keyboard and touchscreen as well as a touch panel located behind the screen.

AT&T first announced its Android plans at the CES show earlier this year, and will also start offering Android phones from DELL ( DELL) and HTC during the first half of this year.

The telecom giant, which also has clinched a deal to sell PALM's ( PALM) Pre and Pixi phones, is beefing up its stable of products in what looks to be a crucial year for the company.

There has been a great deal of interest in AT&T during recent months, thanks to the rapidly shifting dynamics of the telecom market. In addition to heightened competition from Verizon ( VZ), AT&T's exclusive deal with Apple ( AAPL - Get Report) to sell the iPhone has been said to end this year, although the Dallas telco has refused to discuss this.

AT&T recently announced that Apple's eagerly-anticipated iPad will be available on its 3G network in the spring.

AT&T beat Wall Street's estimates in its recent fourth-quarter results, boosted by new wireless subscribers. The company's shares dipped 2 cents, or 0.08%, to $25.38 in pre-market trading Thursday.

-- Reported by James Rogers in New York

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