Business Watch: Apple, Orange, Voda


Tom Alexander’s been a busy chap. Fresh from agreeing plans to merge Orange UK with T-Mobile UK, the Orange UK chief executive has just gone and landed the iPhone.

It’s an almighty coup for the company as it seeks to create the biggest mobile network provider Britain has ever seen.

Of course, it’s a blow to O2, which knew its exclusive deal to sell the high record-breaking handset was coming to and end.

But it’s also a major blow to Vodafone, whose UK business has just unveiled a new suite of social networking tools aimed at helping it make up lost ground on O2.

First though, the details on the Orange deal – sketchy as they were at the time of writing.

In a simple and brief statement, Orange said it had agreed a deal with Apple to start selling the iPhone 3G and 3G S in Britain.

“Orange, which has the largest 3G network covering more people in the UK than any other operator, will sell iPhone in all Orange direct channels including Orange shops, the Orange webshop and Orange telesales channels, as well as selected high street partners.”

There was no news of pricing plans or any exact dates but there is a website where potential subscribers can register their interest.
It confirms what many people thought from the start, that O2’s “multi-year” exclusive deal was, well just two years.

Nevertheless, Matthew Key, who was then O2 UK CEO, has to be congratulated for taking a risk on the iPhone, especially when many of his rivals claimed Apple’s demands for a slice of revenues meant that the deal wouldn’t stack up.

Since then O2 has snared more than one million iPhone subscribers, most of which spend much more per month on data than the average subscriber, many of them via the handset’s popular App Store.
O2 has milked the deal for all it’s worth, taking full advantage of the fact that the UK has been one of the few countries where Apple agreed to limit supply of the gadget to a single network.

Now, however, it will have to reassess its iPhone strategy and its spies will be out trying to find out what plans Orange has for its pre-Christmas launch.

Ernest Doku of mobile phone comparison website,, said that the end of the exclusivity was bound to bring prices down.
“Anyone thinking of buying an iPhone may want to wait a month or two now, as they could potentially get one at a lower price and on a shorter contract if a price and product battle between O2 and Orange begins.
“Orange has certainly hit the ground running following its announcement about the T-Mobile merger. Acquiring the coveted iPhone is sure to attract new customers and will also boost retention levels, as existing customers upgrade at the first opportunity.
“Rumours were rife that Orange was soon to secure the iPhone 3G, but the fact that the latest 3GS model will also be made available will put them on an equal footing with O2.
“What remains to be seen is whether Orange ‘s price point for the 3GS will be competitive enough to force a price war between the networks, and whether O2 will refocus attention on promoting the newly acquired rival, the Palm Pre, to sway those customers on the fence.”

To read the full column, see Mobile News issue 449, out next Monday. To subscribe, click here