Orange and T-Mobile to break O2 exclusivity on iPhone

Apple is poised to open the iPhone 3G to Orange and T-Mobile in a bid to boost sales. The move is set for as early as September and will end Apple's two year exclusive deal with O2. Crucially, the manufacturer will continue to give O2 exclusivity for the new, faster 3GS version, but will grant distribution of the older 3G handset to another network.

Orange and T-Mobile are known to have already begun pitching for the handset. T-Mobile's call centres have also started telling customers it may stock the iPhone. Both networks sell the iPhone in several other countries.

The addition of a new network selling the iPhone will break O2's UK exclusivity on the coveted handset, and will offer a challenge to O2's prices and tariffs. Sources said O2 has been furious with the news and is concerned potential rivals will undercut its prices on the older model.

Apple has secured better terms with component suppliers in the Far East after its scale and buying power surged over the last two years. Many consumers in the UK have been put off the iPhone by what is perceived to be prohibitive pricing from O2, leading many to import iPhones and unlock them for use with other UK operators.

One source at 3 said the network has seen 'thousands' of iPhones on its network, which customers have unlocked to use Skype on and to take advantage of its cheap line rental deals.

Apple's two year partnership with O2 will come to an end in September 2009.

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