O2 'finally wins' UK Apple iPhone contract

O2 has finally won the contract to supply Apple’s iPhone in the UK, according to the Financial Times, which also reported exclusive iPhone partner deals in Germany and France.

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O2 has finally won the contract to supply Apple's iPhone in the UK, according to the Financial Times, which also reported exclusive iPhone partner deals in Germany and France.

According to the FT, T-Mobile will sell the iPhone in Germany, while Orange will offer it in France. Apple's reported deal with O2 would bring an end to a period of intense negotiations, with the two companies first rumoured to have struck a deal at the beginning of July.

The operators have agreed to give Apple 10% of the revenue they generate from the sale of voice and data services for the device, according to the report, which cited unnamed sources. The operators hope to introduce the phone in time for the important Christmas shopping season.

Apple plans to announce the deal officially at the IFA international consumer electronics exhibition in Berlin next week, the Financial Times reported.

The iPhone first launched in June in the US through an exclusive partnership with AT&T. Initial reviews were positive except for concerns about AT&T's slow EDGE (Enhanced Data for GSM Evolution) data network, and the fact that the iPhone's battery can only be replaced by returning the device to Apple. There were also activation problems during the first weekend, when thousands of customers tried to start up their phones at the same time and overwhelmed AT&T's servers.

Since then, speculation had been rife about who Apple would partner with in Europe. Most initial reports agreed that T-Mobile and O2 would be among the partners. Some reports, citing unnamed sources, said that Vodafone, Europe's biggest mobile operator, had been outbid by rivals in eleventh-hour talks.

Europe's splintered telecommunications market makes it harder for Apple to launch the iPhone here than in the US. None of the big carriers cover all of Europe's most populated markets, forcing Apple to strike deals with several operators.

The iPhone could provide a boost for operators in Europe, where customers tend to choose service based on coverage and where brand loyalty is not very strong, Niek van Veen, an associate analyst at Forrester Research, said.

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