Apple iPhone announcement in London tomorrow: will O2 be confirmed as network provider?

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I think we all know by now, don’t we. Since UK journalists were invited last week to the top secret press conference at Apple’s Regent Street store, rumours have been circulating over just what they’ll be announcing, and everyone’s finger keeps on being pointed in one direction – the iPhone.

The Guardian is reporting today that after months of wrangling, O2 has been chosen as the exclusive network carrier for the iPhone in the UK, a deal which one operator told the newspaper was “madly money-losing”. T-Mobile, Vodafone and Orange were all being courted by Apple as well, and reportedly pulled out when the stakes got too high and the figures being mentioned meant they wouldn’t actually earn any money from the deal whatsoever.

Infact, 40% of revenue gained will be returned to Apple, it’s being rumoured, leaving not much for the actual carrier to play with. Sources who spoke to the Guardian are claiming that all four networks were played off against one another by Apple, all believing they had an exclusive, confirmed deal for the iPhone.

It’s understood that Orange and T-Mobile both signed contracts with Apple, but at the last minute the exclusive deal was given to O2, as they were offering a higher proportion of the revenue to Apple than the other networks would be prepared to give. O2 are believed to not actually be making any money from the deal, even over three years, and are treating it as merely an advertising tool, a way to boost their small image here in the UK.

Due to their relatively minute presence here in the UK, Apple has also employed Carphone Warehouse to stock the phone, as they’re worried O2 doesn’t have a big enough high-street reputation. Seems a little bit silly, considering everyone’s heard of the iPhone, and if consumers want one, they’re going to be seeking them out.

One other issue networks had with Apple, and I can imagine this would’ve caused a huge amount of friction, is that none of them were informed of the iPod Touch’s release. Considering the Touch can do pretty much everything the iPhone can, except, you know, make calls, it would be a major cause for concern for any potential carriers of the phone.

By the sounds of things, the other networks involved in the deal all have their noses out of joint, and rightly so. Playing networks against one another, promising exclusive deals to each and actually signing paperwork isn’t the obvious recommended route to do business. But then, it’s the iPhone, so it’s a whole other kettle of fish, really.

Of course this is all just hearsay, the typical blog-rumours sweeping the internet, but at least one thing is for sure – tomorrow’s Apple press conference will guarantee a European launch date, and certainly confirm O2 as being the exclusive network provider. Of course, Tech Digest will be reporting live from the event, so check in tomorrow from 10am onwards to hear all of this confirmed by Apple themselves.

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Katherine Hannaford