O2’s long hold over the iPhone in the UK may be about to come to an end if the latest round of speculation proves true, T-Mobile UK has confirmed that they are currently in talks with Apple to sell the iPhone in the UK. It doesn’t stop there though because rumour has it that Orange are also set to sell the iPhone in the UK. In essence we could be looking at a situation where the UK moves from having only one choice of iPhone provider to having three.
For their part O2 are reported to be ‘furious’ that other networks might get the iPhone and potentially undercut their pricing. O2’s concern may be well founded given the furore that erupted over the pricing of the iPhone 3G S. Many irate O2 customers reacted with frustration and anger on social networking sites like Twitter and contacted O2 to protest at what they said were unreasonably high prices. O2 can take some heart though as the speculation has it they will retain a monopoly on the iPhone 3G S. It’s the iPhone 3G that T-Mobile and/or Orange would be getting. However, the iPhone 3G S may not be enough to attract and, perhaps more importantly, keep customers. Aggressive iPhone 3G pricing from T-Mobile and Orange could see customers ditching the relatively minor upgrade that the 3G S represents for a better value deal on the 3G.
The news gets worse for O2 when one notes that they have essentially put all their eggs in one (well two) baskets this year; the iPhone and the Palm Pre. For instance O2 is the only major British networ not to have optioned the N97. If its competitors were to gain access to one of these devices then it would seriously undermine O2’s strategy and potentially leave them trailing behind given the relatively slow rate of innovation O2 have shown with their pricing options.
Rumours of the iPhone being sold on other networks in the UK have been around almost as long as the iPhone itself and some may wonder what’s so different this time. Well for one thing T-Mobile have actually confirmed they are speaking to Apple, but equally as significant is the fact that there are two different models of iPhone available for the first time. This could be the key factor that allows other networks access to the iPhone. The exclusivity agreement between Apple and O2 hasn’t been made public so we don’t know the details, but it’s conceivable that older models may not be covered by it. At any rate the iPhone available on more networks is good news, if not for O2, then certainly for customers.