Orange iPhone unlock starts demise of exclusive carrier model

Stan Beer
Wednesday, 28 November 2007 17:54

Business IT - Technology

French mobile carrier Orange has made a mockery of the T-Mobile charge of €600 to unlock an iPhone, which was forced upon it by a Vodafone injunction. Orange has offered to unlock iPhones for much more reasonable prices which will give customers an incentive to choose their own carriers in France.

The price to unlock an iPhone purchased in France through Orange is a relatively affordable €150 if they stay with the carrier on an non-iPhone plan and €250 if they choose not to take a plan without the carrier. In addition, an Orange customer can unlock an iPhone for €100 within six months of purchasing an iPhone if they choose an iPhone plan. The resulting prices of €549 and €649, while still relatively expensive compared to the €399 with an Orange iPhone plan, are not totally outrageous for consumers wanting a premium smartphone product in Europe.

Orange is banking on the fact that consumers will simply opt to take one of its four iPhone plans, ranging for €49 to €119 a month because of the additional functionality they offer such as visual voicemail. However, there have been already been thousands of cases of iPhone unlocking hacks reported in France, so Orange has decided to take a pragmatic approach and give customers the option of unlocking the phone through the carrier.

The move by Orange, coupled with the Vodafone forced injunction on T-Mobile signals the first cracks starting to appear in Apple's attempt to impose its exclusive carrier business model on the highly regulated EU telecommunications market. This is not the first time that Apple has run into resistance of its walled garden approach to selling its consumer products in Europe, with the iPod still under scrutiny for its exclusive tie-in with iTunes.

Another problem for Apple is that it has made an enemy of a powerful telecommunications force in the European market by excluding Vodafone from its iPhone partnerships in the three biggest markets of Germany, the UK and France. Vodafone has made it clear that it won't take exclusive arrangements that cut it out of the iPhone picture laying down and, being the largest European-based mobile carrier, it not only has deep pockets but holds significant influence with EU regulators and policy makers.

Orange, mindful of the Vodafone-forced injunction placed on T-Mobile, has obviously opted to play it safe, knowing that it is better to get in early and sign up as many iPhone customers as it can while avoiding possible legal hassles. France is a country that is particularly averse to companies it regards as US monopolies and has not been an entirely happy hunting ground for either Apple or Microsoft, although those companies' products are still in wide use.

The test now is to see how much demand there is among consumers in France for unlocked iPhones that come with no carrier strings attached. If demand is high, Apple may as well start making plans for a future that doesn't involve exclusive carrier deals.