Optical/IP Networks

iPhone Invades UK

Forget foot and mouth disease. Forget the run on British banks. Real news has hit the U.K. -- the iPhone has been unveiled.

Apple Inc. (Nasdaq: AAPL) revealed today that O2, the U.K. mobile operator subsidiary of Telefónica Europe plc (O2) , will be its exclusive carrier partner for the iPhone in the U.K., ending months of speculation. (See O2 Gets UK iPhone, Goodbye, i-mode... Hello, iPhone?, iPhone Fever Hits Europe, Apple-Vodafone Euro Deal Imminent?, 3G iPhone in Early 2008?, and Report: Apple Picks Euro iPhone Partners.)

The deal was announced by Apple's CEO Steve Jobs and Matthew Key, O2 U.K.'s CEO, at a press conference at the Apple store in London's Regent Street this morning.

News that O2 had won the battle to hook up the iPhone was hardly unexpected, though. (See Euro iPhone Tomorrow?.)

From November 9, Apple enthusiasts in the U.K. will be able to get their hands on the 8-Gbyte device for £269 ($536), which is slightly less than the original retail price in the U.S. of $599. Two months after Apple launched the 8-GByte iPhone in the U.S., the company cut the retail price by $200 to $399. (See iPhone Price Cut and Hot Apple Wrap.)

With the iPhone, O2 will offer for the first time all-you-can-eat mobile Internet access packages. The operator will introduce three new tariffs for the iPhone, all of which include unlimited data use and unlimited access to The Cloud 's WiFi network. iPhone users can choose from these three tariff plans: £35 ($70) per month for 200 voice minutes, £45 ($90) for 600 minutes, and £55 ($110) per month for 1,200 minutes.

The "unlimited" WiFi access to The Cloud's network has a usage cap of 60 hours per month. But O2 says that 60 hours of WiFi would allow a user to download more than 40,000 pages per month. The Cloud's network has 7,500 hotspots in the U.K. in cafes, pubs, and airports.

The iPhone will be sold through Apple's retail and online stores in the U.K., O2's outlets, and Carphone Warehouse Group plc (London: CPW)'s retail and online stores -– 1,300 high street stores in total.

U.K. newspaper The Guardian reported that O2 clinched the deal by agreeing to share 40 percent of iPhone service revenues with Apple, but neither Jobs nor O2's Key would comment on their financial arrangements. (See Euro iPhone Tomorrow?.)

In Germany, T-Mobile International AG looks ready to announce its own iPhone news Wednesday. A spokesman tells Unstrung that a press conference in Berlin tomorrow "may be of interest."

Orange France is believed to be Apple's other European iPhone partner, but Jobs declined to talk about any territory other than the U.K. at today's press conference.

— Michelle Donegan, European Editor, Unstrung

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