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iPhone Carrier Exclusivity Ruled Illegal In France

Gordon Kelly


iPhone Carrier Exclusivity Ruled Illegal In France

Could the French be about to do iPhone owners around Europe one big favour?

In a ruling this week the country's competitions authority announced it has temporarily barred the exclusive distribution deal between France Telecom and Apple for the iPhone. Describing the agreement, which utilises FT's Orange network, as "by nature introduc{ing} a new factor of rigidity in a sector that already lacks competition", the standards' body declared the handset open to all French telcos.

As reported by DowJones, France Telecom wasn't available for comment and it is currently unknown whether rival networks now plan to open negotiations with Apple given the ruling is only in force while the case is delved into more deeply.

Now while exciting (or at least mildly so) this isn't the first time something like this has happened inside the EU with Vodafone particularly objectionable to T-Mobile's exclusive deal in Germany last year demanding the temporary sale of unlocked iPhones. Ultimately however T-Mobile prevailed in the dispute and the open handsets were quickly taken off sale.

So what does this all mean for the UK? Potentially everything and nothing. On the one hand, the move may incite rival telcos in Blighty to kick up a fuss with O2 but on the other there is no universal set of mobile phone laws across the continent to fall back on. One little known fact however (thanks Riyad) is that networks are apparently obliged to open up a handset once a customer completes their formal contract. With original iPhone owners now 13 months through an 18 month deal it will be interesting to see what occurs come May.

Watch this space...


DowJones via CNNMoney.com


December 18, 2008, 1:42 pm

Have to admit I find the whole unlocking iPhone's in the UK a big mystery. Are these the same people that install Linux just to prove that they can, even though it means living without most known peripherals and doing a rebuild using 1000 complex / commands every few days? Or perhaps the same people that practice self-mutilation for the fun of it?

O2 do a range of good tariffs. I have the &#16335 a month one and for that you get the unlimited web browsing / email and enough minutes / text to keep most people happy. They also treated the old iPhone users very well allowing them to upgrade to 3g without waiting until their 18 months ran out.

Apart from the odd person that can't get O2 reception this washes right over me.


December 18, 2008, 2:45 pm

AJ, its more a difference of philosophy, than any disatisfaction with O2's behaviour. Exclusive network deals are essentially anti-competitive. Were the iphone available on more networks, as good as the O2 packages are, competition would drive the prices down. Of course, the critique is that Apple spent the money developing the iphone, so they should be allowed to corner the market and sell it in whatever restrictive way they want. However, there are two problems with this argument:

1) Opening the iphone to more networks could well increase the sales for Apple anyway. Were that not the case, then how would the other handset manufacturers recoup their r+d costs without exclusive deals?

2) Let's say that my first point is wrong, and Apple make more sales by maintaining inflated prices on exclusive network deals. Exclusive sales deals (along with patents etc) might be good for the profits of one company, but they discourage innovation in an industry as a whole. The reason for this is that the company that maintains its exclusivity can rest on its laurels, safe in the knowledge that it has captured a section of the market for a period of time and won't be threatened. They only need to innovate when the industry has caught up, which takes longer when there is exclusivity. The argument is a little bit blurred by the fact that we are talking about two different "industries", that of the handset manufacturers, and that of the network providers. The argument holds equally for both though. Innovation in handset's is easy to see. Innovation in network provision comes through pricing models, coverage, etc

Hope that helps!


December 18, 2008, 3:11 pm

Seems a bit of a harsh way to look at unlockers, there are a lot of people who are already locked into a contract with someone other than 02 who would like to have an iPhone, people who are outside of the 02 network, people who dont want to get into an 18 month contract ect ect...

Put it this way, yes you are right the 02 contract for &#16335 with 600mins, 500 texts and unlimited data , but with that nasty 18 month contract.... And the phone costs &#163155 for 16GB... grrr...

OR you could get an unlocked 3G iphone (&#163300 from ebay) and the simplicity sim card from O2 which is &#16320 a month for 500mins, 1000txts and unlimited data bolt on, and only a month long contract. Bigger outlay, but then after 10 months you've made back the extra &#163150 and so if you "were" to go on for the next 8 months you would be saving &#163120 overall. And you have the get out clause if a new phone/cheaper contract comes along that you want...

So actually its the clever people who go unlocked....


December 18, 2008, 3:25 pm

Although I see your point - I simply don't agree.

1) Apple should (like any other company) be allowed to set any strategy it wants. If it backfires on them, it's their own fault.

2) There is no security here. Android based handsets will doutlessly take massive chunks from Apple's share and be available on any network. So again if Apple want to remain "exclusive" then it's totally up to them.

I still don't understand for 1 moment why people go out and spend &#163300+ on a jailbroken handset just so they can use it on another network and almost certainly get fleeced for downloading data. Plus the massive hassle of keeing it jailbroken as every patch just locks it again. I just don't get it.


December 18, 2008, 3:42 pm

most are probably gonna disagree with this, and normally I am the guy who will advocate consumer choice but I have to say that (as with anything to do with the iphone) the hype around this has been pretty ridiculous.

- are there not handsets that you can /only/ get on tmobile?

- are there not handsets that you can /only/ get on vodafone?

- are there not handsets that you can /only/ get orange/o2/virgin/three/insert other carrier of the world here

I cant see why its really that wrong for a company who makes what is effectively a luxury product to sell it in the manner they desire

- it is after all, /their/ product

if you really do want want one, then you have to do/pay what they want for you to get it

and if you dont like the terms then don't buy it - it is as I said, a luxury item

- its not like you need an iphone to live.

- if you don't like the way apple does things then don't buy their products (note that this applies to their comparatively expensive notebooks as well)

next will it be wrong for consoles to have exclusive games?

or certain retailer to have exclusive stock or colour variations of a product?

- cant phrase what I am trying to say well so from fear of making this post longer than it needs to be I will just post the links to some other comments that maybe expand what I mean rather than quote them fully.





December 18, 2008, 4:51 pm

Has anyone really looked at the iPhone deals? And worked it out? I thought the whole point of getting into an 18 month contract is because it subsidises the phone and offers you a better deal overall than if you stay out of a contract, however the iPhone contract doesnt seem to offer any such benefit...

O2 sell the iPhone for PAYG for &#163350 for the 8GB.

On an 18 month contract you get 600mins and 500txts and unlimited Internet and the iPhone costs &#16399

O2 also offer their simplicity sim only offers which have 500 mins, 1000 texts and unlimited Internet (if you use the bolt on)

That means if you buy the iPhone sim free and the simplicity card then after 16 months, you have spent the same amount as you would have done in the contract, e.g. you get two months FREE and 500 texts extra a month! So how is it better to get into a contract? Because of the exclusivity with O2, O2 are charging a higher price than they would be able to if they have a competitor.

In comparison, the N95 (which I might add is the same price as the iPhone if bought sim free) is available free on a &#16335 contract with 600mins and 1000txts and unlimited internet, basically because it is available everywhere and the competition makes O2 have a more competitive price


December 18, 2008, 5:17 pm

In the same way that service providers can factor in QoS (Quality of Service) at a premium, i think Apple is within ITS rights to negotiate for (Quality of Experience).

This is most easily maintained when there are limited avenues by which that minimum guaranteed quality can be affected, and opening up the device to everyone simply means they've got more issues to deal with, and the QoE is harder to maintain.

my 2 cents...


December 18, 2008, 5:46 pm

I'm a sicko....I actually enjoy hacking my hardware! Small moral victories, I know, i'm sad :)


December 19, 2008, 12:36 am

Personally, I think it is totally unfair to the customer that Apple reserves the right to distribute their "phone" on designated networks exclusively. The Iphone has very attractive features but not enough to compare to some other phones out there. Sure it has the suberb touch screen technology (unrivalled so far), it is also an Ipod (which I love and own) but it is far from being a decent camera phone, far from being internet friendly phone, and the list goes on. How does it make it to best phone? God knows. Is it a fashion statement? Hell yeah. This is why the phone is so popular and selling so well. Come on Apple, stop making your phone network exclusive and release it to the masses properly (and give us an Iphone 32GB), you know you can do it, you have the technology and for god sakes do not milk the cashcows (our udder is going to dry up before you know it and you'll be missing out big time).


December 19, 2008, 8:07 pm

> So how is it better to get into a contract?

Might be a stab in the dark here, but usually on contract you get good upgrade options, PayG upgrade options are rubbish. eg. Like somebody already said here the upgrade from the original I-Phone to the 3g was rather nice. :)

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