Telstra partners stay true, with or without the iPhone

Telstra's biggest reseller Vita Group — owner of the Fone Zone and Next Byte retail chains — won't ditch its main mobile phone supplier after the telco reportedly failed to win rights to the iPhone.

Telstra's biggest reseller Vita Group — owner of the Fone Zone and Next Byte retail chains — won't ditch its main mobile phone supplier after the telco reportedly failed to win rights to the iPhone.

The Australian Financial Review revealed yesterday that Telstra's negotiations to resell Apple's much-hyped 3G iPhone were derailed over the carrier's insistence on pre-loading the device with Telstra content. Telstra declined to comment on the matter.

Vita Group CEO David McMahon said that while he'd love his stores to be selling the iPhone, his group will remain loyal to Telstra and resist the temptation to switch to Optus or Vodafone, both of which will sell the device from next month.

"There is a frenzy around the iPhone, particularly after being launched as a 3G model, and there is no doubt it will be a successful product," he said. "In an ideal world, we would be selling it in our Next Byte stores, but we've had an exclusive relationship with Telstra for 13 years and we would not endanger that relationship over one product."

This is despite McMahon's plan to review the "lowest performing 20 per cent" of Fone Zone outlets to consider re-branding them as Apple-focused Next Byte stores, depending on the size of the store and its proximity to existing Next Byte dealers. Next Byte stores, according to recent Vita Group statements, have been "performing ahead of expectations" since Vita acquired them in August last year, while its mobile phone resale business has underperformed.

McMahon said the company will "wait and find out what Telstra's intentions are around the iPhone down the track" before "looking at the options available".

McMahon said he believes users will see the most benefit if Telstra does agree to a deal with Apple.

"The best combination from a user perspective would be the iPhone coupled with the Next G Network," he said. "You would have the highest data speeds and something like 98 per cent of the population covered, whereas with Optus and Vodafone you're looking at slower speeds and only about 60 per cent coverage."

"Hopefully at some stage, customers will get that choice," he said.

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