Orange pairs with Apple on iPhone deal

O2's exclusivity on the Apple handset will draw to a close by the end of the year, as its France Telecom-owned rival wins the right to sell the iPhone in the UK

Orange will carry the iPhone in the UK in the fourth quarter of this year, the operator announced on Monday.

The move marks the end of competitor O2's lucrative exclusivity on Apple's handset in this country, and comes days after O2 announced the release details for the rival Palm Pre smartphone, on which it has UK exclusivity.

Orange did not say exactly when it will begin to carry the iPhone. When O2 launched its iPhones in November 2007, it did not specify the duration of its exclusivity deal with Apple, other than to describe it as "multi-year". The most conservative understanding of 'multi-year' as 'two-year' indicates that the earliest Orange could start stocking the handset is 9 November.

All currently available versions of the iPhone — the 8GB 3G, the 16GB 3GS and the 32GB 3GS — will be offered by Orange, a spokesperson for the company said. The France Telecom-owned operator has not given details of pricing. Orange sells the iPhone in 28 countries and territories worldwide.

The end of O2's iPhone exclusivity in the UK confirms rumours that had been circulating in recent months, and "fits in with O2 getting the Palm Pre", Gartner analyst Carolina Milanesi said.

"It's something we expected, given how Apple moved away from exclusivity deals in all the other countries except the UK, Germany and US," Milanesi said. "Apple will get a larger footprint in the UK, which is their biggest market outside the US."

Milanesi predicted that Orange will offer similar iPhone tariff pricing to that available on O2 and will rely instead on "differentiated offerings on services" to set it apart from its rival. O2 has various tariffs for the iPhone — for example, a £44.05-per-month tariff on a 24-month contract gives the user the iPhone 3GS for free.

The Gartner analyst also said O2 would be likely to position the Pre as an alternative to the iPhone for "people who want a similar experience but with a Qwerty keyboard".

Orange and T-Mobile are currently in talks regarding a merger, which is scheduled for mid-2010. A spokesperson for T-Mobile said on Monday that the two operators are remaining "standalone operations" for now, and that the Deutsche Telekom-owned carrier has no plans to stock the iPhone.