Orange iPhone A Preview Of Things To Come for AT&T?


An Orange iPhone is on the way, and O2's iPhone exclusivity in the U.K. is a thing of the past.

That's the word from France Telecom's SA's mobile business, Orange, which said Monday that it will begin selling Apple iPhones in the U.K. by the end of 2009, effectively ending the two-year exclusive iPhone contract held by O2, the rival mobile network owned by Telefonica SA.

Now that a rival player has broken through in one single carrier-dominated iPhone market, rest assured that AT&T, which maintains exclusive rights to the iPhone in the U.S., is watching to see how Orange pulled off that kind of iPhone coup and how ending single carrier domination in one big market will play out in Apple's eyes as AT&T's own iPhone contract comes under review. A number of analysts have speculated in recent weeks that Apple will look to branch out from AT&T as early as summer 2010.

O2 currently has more than 1 million iPhone subscribers in the U.K. and has enjoyed its exclusive contract for nearly two years. In a press release announcing its iPhone plans, however, Orange touted the strength of its 3G network in an opening salvo to attract new business.

"Orange, which has the largest 3G network covering more people in the U.K. than any other operator, will sell iPhone in all Orange direct channels including Orange shops, the Orange Webshop and Orange telesales channels, as well as selected high street partners," it said in a statement.

Orange didn't say when it would have the iPhones available but sources told The Wall Street Journal it would be by Christmas.

O2 fired back with a press release of its own Monday, stating: "We're proud that we've been able to offer an exclusive iPhone deal to our 20 million customers for the last two years.We always knew that iPhone exclusivity was for a limited period of time, but our relationship with Apple continues and will be an ongoing success. We have over 1 million iPhone customers and they remain very important to us."

O2 wasn't above a little pot-stirring, either; it used the same release to tout its recent agreement to carry the Palm Pre exclusively in the U.K..

Geoff Blaber, an analyst at CCS Insight, told The Wall Street Journal Monday that Orange stands to gain most on customers if not on profits, seeing as the iPhone's price has fallen in the U.K. since it launched there in November 2007.

O2's current iPhone plans for the iPhone 3GS sell the phone for between free and 274 pounds (about $436) depending on plans, contracts and taxes. BBC News speculated Monday that Orange will look into significant price drops for its iPhone plans to get customers to switch and come on board fast.