Orange to offer iPhone service in the UK

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Potential iPhone owners in the United Kingdom have a choice when it comes to service providers now that Orange has announced plans to sell the iPhone 3G and 3GS in the UK. The iPhone's Orange UK debut comes later this year.

Previously, all things iPhone were the province of O2, which had been Apple’s exclusive partner since the iPhone launched in the UK in November 2007. (True, Carphone Warehouse also sold the iPhone in the UK, but when it came to signing up for cellular service, O2 has been the only game in town.)

PC Advisor reports that Orange—which claims to have the largest 3G network in the UK—will sell the phone through its stores, Web site, telesales channels, and select partners. Pricing hasn’t been announced, though don’t look for Orange’s iPhone price to undercut what O2 offers. Carolina Milanesi, research director at Gartner, tells IDG News Service’s Mikael Ricknäs that in other countries with multiple iPhone carriers, the price offered by one operator tends to reflect the price offered at the other.

Multiple carriers can benefit consumers in other ways, however. When this summer’s iPhone 3.0 update brought tethering capabilities to the iPhone, Australian carrier Vodafone announced the feature would be free to its customers—an apparent challenge to rival carrier Optus, which had planned to charge its iPhone customers for tethering. Here in the U.S., of course, where we have just one carrier for the iPhone, iPhone 3.0’s tethering capabilities aren’t yet supported—and there’s no indication when they might be except for AT&T’s vague promise that it’s coming.

For Apple, the benefits of adding another carrier in the UK are obvious—it gives the company access to new customers who didn’t buy iPhones when the devices were offered only by O2. In an August report contending that the iPhone will be available via multiple carriers in the U.S. in 2010—more on that in a moment—Piper Jaffray senior research analyst Gene Munster noted that multiple carriers help Apple achieve greater market penetration. In France, for example, Apple’s market share jumped after other carriers began offering the iPhone earlier this year, Munster said in his report. (Ironically, it was Orange that enjoyed an exclusive iPhone arrangement in France; now Bouygues Telecom and SFR both offer the iPhone to French customers.)

It’s unclear how many countries in which the iPhone is available have more than one carrier—Apple didn’t return a phone call requesting that information—but I count at least eight fairly large markets where there’s more than one game in town: Australia, Austria, Brazil, France, India, Italy, Portugal, and Switzerland. Major markets that still retain a single carrier now that Orange and O2 are duking it in the UK include China, where China Unicom starts selling the iPhone next month, Germany, and the U.S.

So when can we expect a choice in iPhone carriers on this side of the pond? Alas, it’s not that simple a matter. Besides any lingering contractual issues—while there are rumors AT&T’s exclusivity deal ends next year, there’s never been any official word on just how long AT&T and Apple are joined at the hip, iPhone-wise—there’s a technological hurdle as well. Verizon—the company most often bandied about as the Gallant to AT&T’s Goofus—currently relies on CDMA (Code Division Multiple Access) technology for its network; the iPhone is currently based on GSM (Global System for Mobile communications) technology. True, Apple could come out with a CDMA model of the iPhone, but with Verizon looking ahead to Long Term Evolution (LTE) technology for its network, it seems unlikely that Apple would go through the trouble. Adding Verizon as a carrier once LTE is rolled out seems like a more likely scenario, but that won’t happen until 2010 at the earliest.

The bottom line: The iPhone may be broadening its reach in other markets, such as the UK, but in this country at least, AT&T looks to be Apple’s only partner for some time to come.

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