Orange Loses Exclusive Apple iPhone Deal In France

A French government authority has temporarily halted France Telecom's exclusive distribution rights for Apple's iPhone in the French market. Other telecommunications vendors immediately said they would begin selling the popular mobile phone.

The decision by the national Competition Council barred the exclusive five-year deal between Apple and Orange, France Telecom's mobile telephony business unit, on the basis that the Apple-Orange relationship was a threat to competition in the mobile telephone market in France and could be detrimental to consumers.

The council said agreements like the Apple-Orange deal reduce competition in pricing, customer service, network quality and service provider differentiation.

Under the deal, Orange held exclusive wholesale distribution rights for the iPhone 3G in France and the company restricted sales through resellers to those also selling Orange network contracts.

The Competition Council said its preliminary ruling would take effect Thursday, allowing other mobile phone operators to begin distributing the iPhone, Reuters reported. The temporary injunction remains in force until the government entity makes a final determination in the case. An appeal by Orange in the French courts is also expected, ensuring the dispute will drag on for months.

French mobile phone service provider Bouygues Telecoms (part of Bouygues SA), which filed the initial complaint about the Apple-Orange relationship, said it hoped to begin carrying the iPhone shortly. Mobile phone service provider SFR, owned by Vivendi SA, and Britain's Vodaphone Group Plc also signaled their intentions to begin offering the Apple iPhone to French consumers.

Orange has sold some 450,000 3G iPhones and 150,000 first-generation iPhones.

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