Telecoms: 02's exclusive deal for Apple iPhone hangs in the balance

August 4, 2008 - 0:0

The exclusive deal that O2 has to supply the iPhone in Britain is understood to be under threat, with other mobile phone operators seeking to take advantage of a renegotiation period in the company's contract with Apple.

O2, owned by Spain's Telefónica, said yesterday that the new 3G version of the phone - which went on sale last month and immediately sold out - had become its fastest-selling handset ever.
But its status as the only network that carries the phone could come under threat next year.
O2 started stocking the original version of the iPhone last November and its deal with Apple is believed to run until 2012. There is understood to be a window for renegotiation after two years and other operators are hopeful that Apple will have partnered with more than just one network by Christmas 2009.
There has been speculation that Orange - which has the iPhone exclusively in France under a three-year deal and also supplies it in a number of emerging markets - is looking to get its hands on the phone. The company, owned by France Télécom, came very close to being Apple's UK partner but was dumped in favor of O2 at the last minute.
Orange's UK boss, Tom Alexander, did not comment yesterday as his company announced its half-year figures but did say: ""I would love the iPhone, especially with our big emphasis on
[mobile] data
[services], it would be great to have.""
He pointed out, however, that the weekend following the 3G iPhone's release on July 11 was actually the company's best retail weekend of the year so far, as customers who found stocks had run out in O2 stores and Carphone Warehouse turned to other devices. Orange was also giving iTouch digital music players away to customers willing to sign up to a contract with a different phone. Apple's contract with O2 is also understood to have a get-out clause, which allows the Californian technology company to terminate it if it does not think the phone is being marketed successfully.
But O2's European boss, Matthew Key, chairman and chief executive of Telefónica Europe, said: ""Apple are extremely happy with the relationship we have got with them.""
(Source: Guardian)