Orange UK gets hands on iPhone in UK

Telefonica O2 better hope the soon to be released Palm Pre sells well in the UK, as the carrier is about to lose its exclusivity deal on the Apple iPhone.

An announcement from UK rival Orange on Monday revealed that the France Telecom owned operator will be offering the iPhone 3G and 3GS before Christmas.

Details on pricing and tariffs will be revealed nearer the time of launch, Orange said.

What’s not yet clear is whether there are provisions in the contract allowing the new entity formed from the potential merger of Orange and T-Mobile UK to sell the device, should the merger deal be given the go ahead. An Apple spokesman refused to comment and Orange is getting back to us on that note.

Now itt looks like O2  had good reason to blow the rest of its subsidy budget on an exclusivity deal for the Palm Pre. Positioned as a serious competitor to the iPhone and Nokia’s flagship N97 (which O2 isn’t offering direct), the Pre will go on sale October 16. Last week O2 revealed that the Pre will be offered at an identical price point and tariff to the iPhone, with the device available for free on a 24 month contract as well as the higher end 18 month contracts and bundled with unlimited mobile data usage.

But Dave McQueen, principal analyst with Informa, notes that pricing will be key for Orange in order to tempt customers away from O2. If Orange offers the iPhone at the same price as O2, it will have to differentiate on quality of service and user experience, which is where the potential merger between T-Mobile and Orange becomes important.

“Not only would the potential merger between Orange and T-Mobile make the iPhone available to three quarters of the UK population overnight,” said McQueen. “It may also give Orange a more data friendly network to offer iPhone users better Quality of Service,” he said.