Orange poaches O2 UK's iPhone deal at last

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Orange poaches O2 UK's iPhone deal at last

By CAROLINE GABRIEL

Published: 28 September, 2009

READ MORE: UK | O2 | Orange | iPhone

O2 UK's exclusive on the iPhone is to end even sooner than expected, with Orange to start selling the Apple 3G and 3GS models in time for the Christmas rush - possibly hitting a launch date close to that of O2's own latest sole-rights deal, the Palm Pre (on October 16).

"Orange UK and Apple have reached an agreement to bring iPhone 3G and 3GS to Orange UK customers later this year," said the French operator in a statement.

Of course, its main challenge is to ensure that it turns the deal to positive advantage, beyond just spoiling O2's party. O2 has presumably snapped up the majority of the iPhone loving base, when these users were still prepared to pay a premium - how many people are really left who want an Apple phone and haven't got one yet? The answer - those who are not prepared to shell out a high upfront price or a hefty data fee for one. Which is why the handset needs to go non-exclusive now, to appeal to a broader base.

This is likely to create a price war between O2 and Orange - and possibly other operators like T-Mobile - and should divert some of O2's attention to newer smartphones. This will be a relief to its non-Apple loving customer base, which have complained at how it has ignored other attractive launches in order to put all its efforts into hitting its iPhone targets. Already O2 has lined up innovative exclusives like the 1GHz Toshiba TG01 and the Palm Pre, while Orange itself has announced several strong phones such as the Android Hero.

Orange customers can register their interest in the iPhones, though there are no price/plan details yet. They can purchase the handset directly or through some retail partners.

At the end of its two-year exclusive, O2 has more than a million iPhone subscribers. Only a few countries still have Apple exclusives in place - Germany and the US are the other main ones. T-Mobile Germany is expected to lose its deal after two years too, but AT&T, whose arrangement has already gone on longer, and is more advantageous to Apple, could be renegotiated.

China Unicom will start selling the phone next month, for about CNY5,000 ($740) though this may be subsidized with data plans of around CNY886 a month. Unicom's deal is not exclusive and it is possible that Apple will sign a deal with China Mobile too - most likely for its GSM/EDGE network rather than for its TD-SCDMA 3G system, at least in the near term. The Chinese models disable the iPhone's Wi-Fi connection, though there is already an extensive grey market base of the handset in China, most of these gadgets sporting illegal Wi-Fi.