T-Mobile looks to end O2's iPhone exclusivity

LONDON - O2 could lose its iPhone exclusivity in the UK as T-Mobile talks with Apple about a distribution agreement for last year's generation of the handset, the 3G, in a bid to boost flagging sales, according to reports.

According to a report in the Register, T-Mobile has met with Apple about launching the iPhone 3G from its network within the next few months.

O2, which has been the sole distributor of the iPhone in the UK since 2007, would still keep exclusivity of the iPhone 3GS, the newer, faster model released by Apple in June.

T-Mobile, the current number four mobile network in the UK, behind O2, Vodafone and Orange, would look to change its fortunes by offering an attractive handset. The company is the exclusive distributor of the iPhone in Germany.

The move to multiple networks would mark a significant shift in Apple's marketing strategy for the iPhone, which had previously relied on subsidies from network exclusives to keep a low price point.

Rumours that Apple wants to end network exclusivity have been apparent for a number of months, with speculation that AT&T in the US could also lose sole retailer rights.

Orange and Vodafone are also understood to be keen on carrying the iPhone 3G for their customers.

Questions remain as to whether Apple holds the sufficient amount of stock to handle the influx of demand if customers were able to get their hands on the cheaper iPhone 3G.

Apple also runs the risk of confusing consumers with its split retail roles, between the more expensive 3GS and, essentially, last year's technology, the 3G.

The company sold 1m iPhone 3GS' within the first three days when it was released in June. Apple has sold more than 22m iPhones to date.

T-Mobile has refused comment, calling the report "merely speculation".

O2 was not available to comment as of press time.

An eight-gigabyte iPhone 3G is available for free on many O2 18 and 24 month contracts, with tariffs ranging between £34 and £73.

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