T-Mobile will sell an unlocked version of Apple's popular iPhone in Germany

Mobile Bows to Pressure, Unlocks iPhone in Germany
Rival Vidafone challenges Apple's policy of an exclusive deal, as the iPhone spreads through Europe
T-Mobile will sell an unlocked version of Apple's popular iPhone in Germany while it fights a legal challenge from rival Vodafone, the company said last week.

The move comes shortly after a court granted an injunction requested by Vodafone mandating that T-Mobile either sell an unlocked version of the iPhone or withdraw the product from the market.

Vodafone contends German competition law prohibits an operator from selling a locked phone with a two-year contract. Last week, T-Mobile announced it will sell an unlocked version of the iPhone for €999 (US$1481). T-Mobile sells a locked 8GB iPhone in Germany for €399 including 19 percent value-added tax.

However, T-Mobile is appealing the injunction and will withdraw the unlocked version if the company prevails, said Klaus Czerwinski, a T-Mobile spokesman, based in Bonn. T-Mobile is also considering filing for damages against Vodafone.

"We think the law does not apply to this situation," Czerwinski said. "We are still going to court."

The unlocked version means that users can put in a SIM (Subscriber Identity Module) from another operator and subscribe to a different -- and perhaps cheaper -- service plan.

European consumers are used to getting free or heavily subsidized phones if they sign up for a long-term contract, but those handsets usually won't work on other networks. Unlocked phones command a higher price.

Apple's strategy of securing agreements with just one operator has rankled many interested in the iPhone. The iPhone's relatively high price and 18- to 24-month service contracts caused hackers to find ways to break the software locking the phone to one operator. Apple has been patching its software to nullify the hacks.

Vodafone said users who opt for the unlocked version will miss out on some of the features that are exclusive to the company's network, such as the iPhone's Visual Voicemail, which lets users select and listen to messages, Czerwinski said.

By the end of next month, Vodafone will have the only nationwide EDGE (Enhanced Data Rates for GSM Evolution) network coverage throughout Germany, Czerwinski said. EDGE enables download speeds between 70K bps (bits per second) to 135K bps.

The iPhone can use EDGE and Wi-Fi networks but lacks 3G (third-generation) capabilities. Vodafone contends its flat-rate data traffic package is the most competitive in the German market since the iPhone uses a lot of data.

Vodafone was among several operators vying to be the iPhone's sole supplier in Germany but lost out to T-Mobile. T-Mobile said it sold 15,000 iPhones when it went on sale in Germany on Nov. 9

Deutsche Telekom to sell Apple iPhone without subscription

German telecommunications operator Deutsche Telekom said Wednesday that as a result of a court ruling it would sell Apple's iPhone without forcing customers to sign up to the operator's mobile telephone service.

It was the first time that exclusive distribution conditions of the iPhone through a mobile operator have led to a court decision.

Deutsche Telekom will charge 999 euros (1,480 dollars) for the hot multimedia item, instead of the 399 euros paid when buyers take a subscription to Deutsche Telekom's T-Mobile unit, a statement by the operator said.

Sal Oppenheim analyst Nicolas von Stackelberg told AFP: "The price has to be high, in the end it's a luxury product meant to be shown off."

And customers would still have to purchase the iPhone at Deutsche Telekom outlets, he noted.

A Deutsche Telekom spokesman said: "T-Mobile will challenge the decision," which meant the court in northern Hamburg, which issued a temporary injunction on Tuesday would be asked for a final ruling on whether the distribution deal is valid or not.

Meanwhile, the German telecoms operator will offer to unblock iPHones that were bought with a subscription since Tuesday, it said, adding that the new conditions would apply "until the end of the judicial procedure."

The Hamburg court granted a temporary injunction to British telecom operator Vodafone, which had challenged an exclusive distribution agreement between Apple and T-Mobile.

Apple has also signed exclusive distribution contracts in the United States with AT&T, and in Britain with O2.

In France, telecoms operator Orange is to sell iPhones starting November 29, but French legislation already requires Orange to sell the phone with or without a mobile subscription.

Programmes have circulated on the Internet that allow iPhones to be used with various telecoms operators, but Apple has threatened to fight back with updated software.

Vodafone's request for a court ruling, von Stackelberg said, "shows that it really needs it (the iPHone), after first criticizing it."

German press reports have said that T-Mobile agreed to pay Apple up to 30 percent of the operator's iPhone sales in order to seal the German distribution deal.