AT&T is once again looking for a phone that can cut out Google, but still run Android. There was the Amazon Fire Phone (and the various "Facebook" phones before that) all of which failed, miserably for the carrier. Cyanogen Inc's CEO Kirt McMaster has been pretty blunt about making an OS that runs Android but doesn't use any of Google's services. That's not something new - it's something that works well in China, mainly due to Google being blocked there - but something that hasn't worked out too well in the US. According to this report, Cyanogen is supposedly working with ZTE to make this phone and it'll be sold on AT&T's network.
The report actually sounds a whole lot like the Amazon Fire Phone. The reason that AT&T is so interested in a phone that doesn't run Google, is so that they can load it up with even more pre-installed apps. After all, AT&T does have a few services they want to push their users to use, like newly acquired DirecTV.
Things would break down with ZTE building the phone, Cyanogen making the software and AT&T selling and offering service for it. Right now it looks as if it would be exclusive to AT&T, which shouldn't be a big surprise. However, ZTE may not be in the running anymore, after the US government came after them for supplying Iran with electronics. Remember, Iran is under a trade embargo with the US, so this was not a good look for ZTE. There was a temporary export ban placed on ZTE, which has since been removed. But they should be treading lightly right about now.
Cyanogen, before, has said that they could build an OS running on Android without Google. This isn't that surprising considering the fact that Microsoft has given them some funding, and we've seen Microsoft apps make their way into Cyanogen OS as of late. In fact, Cortana is already on Cyanogen OS devices that are already available. Cyanogen could also use Amazon's suite of apps to fulfill other gaps in their OS, like the app store. Right now, it's important to treat this as a report or a rumor. While it does come from The Information, which means it's likely true, it's still important to take this with a grain of salt. Of course as we learn more, we'll be sure to pass that along.