Report: T-Mobile to sell iPhone in Germany

IDG News Service - Deutsche Telekom AG's T-Mobile division has won a deal to sell Apple Inc.'s iPhone in Germany starting on Nov. 1, according to a report in a German regional newspaper.

T-Mobile won the bid at the last minute from Europe's largest mobile operator, Vodafone Group PLC, according to the report in the Rheinischen Post newspaper on Wednesday.

Apple's combined phone, music player and Internet device will be sold in Germany for $613, according to the newspaper, which cited unnamed "sources in the business community."

T-Mobile declined to comment on what it called a "rumor," and noted that Vodafone and The Carphone Warehouse Group PLC have also been linked to potential iPhone deals in previous news reports. A Vodafone spokesman also declined to comment, and Apple could not immediately be reached.

Apple launched the iPhone in the U.S. on Friday to largely positive reviews, although its mobile partner, AT&T Corp., experienced delays in activating some people's phones over the weekend. The deal with AT&T is an exclusive one in the U.S., meaning other operators there won't be able to offer the iPhone for some time.

It's unclear what distribution model Apple will use in Europe, although it seems likely that it will sign up several operators to tackle Europe's fractured telecommunications market. No single operator covers all of Europe's biggest markets. T-Mobile is present in Germany, the U.K. and eight other countries, but not in France, Italy or Spain. In France, Vodafone only has a minority holding in SFR, while Orange, a subsidiary of France Télécom SA, is not present in Germany or Italy.

Heated talks are probably under way between Apple and most of Europe's big operators, said Niek van Veen, an associate analyst at Forrester Research Inc. All of them could potentially benefit from the connection to Apple's brand, and the long subscription contracts the iPhone could help them to secure, he said.

Unlike some operators, T-Mobile has not invested heavily in its own video and music services, which may make it easier for Apple to negotiate with, van Veen said. On the other hand, T-Mobile doesn't have as many customers outside of Germany as some of its rivals.

"The difficulty for Apple is that the operators will have their own demands, and they would probably like to launch with the service in all countries," he said.

Apple is reportedly requiring AT&T to share some of the revenue it makes from the iPhone, he noted, a new business model that Europe's operators may be reluctant to swallow.

"So it's more than just a question of reach and what Apple wants, it's how much operators are willing to sacrifice their current [business] model for this phone," van Veen said.

Apple has said it expects to launch the iPhone in Europe in the fourth quarter but has provided no other details.