France Telecom Exclusive Deal To Sell iPhone In France Banned
In a move that France Telecom itself has called a “serious blow,” France’s Competition Council has temporarily suspended the agreement the firm has with Apple that lets its French operator Orange sell the iPhone 3G exclusively. The competition watchdog said the ban, which takes effect on Thursday, is aimed at letting consumers buy the gadget on contract from competing operators SFR and Bouygues Telecom, right in time for the holiday sales season. France Telecom said it would appeal the decision.
So, how angry are France Telecom execs with this decision? In a statement issued today, the global telecoms group had nothing but sharp criticism for the Competition Council whom it accused of making a decision without “in-depth examination,” that would not only “undermine Orange’s efforts to develop high-speed mobile services in France,” but would have a “major impact” on the market, with possible “serious consequences on manufacturers, as well as their subcontractors and software suppliers.” The best, however, was reserved for the number three operator Bouygues Telecom, which initiated the complaint in mid-September.
France Telecom basically accused its smaller rival, which it noted was “most behind” in rolling out its 3G network,” of crying to the Competition Council, rather than “offering genuine competition based on innovative offers.” It also noted that Orange has had the iPhone exclusive deal for a year now, but that it took Bouygues Telecom until now, just before the lucrative holiday sales season to request these “urgent conservative measures.”
The Council said in a statement that France Telecom’s five-year deal with Apple, which locks subscribers into a 12-24 month contract with Orange, adds another obstacle for consumers in a market already suffering from a lack of competition. Any future exclusivity deals would also be limited to three months at a time. As for an appeal, it’s going to take a long time for France Telecom to get the decision reversed, if at all. An “in-depth examination of the agreement” would likely take 12-15 months to complete, a Council spokesperson told Reuters.
Bouygues Telecom said in a statement it hoped to start selling the iPhone as soon as possible, while France’s second largest operator the Vivendi-Vodafone owned SFR, said it has “always been interested” in selling the iPhone, “but not at any price.”
L’iPhone, as its known in France, has been good to France Telecom, which said it has sold 450,000 of the 3G gadgets to date. As for other operators around the world, the iPhone has helped lure subscribers and boost data usage. The council estimated that Orange raked in 220 million euros ($308.2 million) from iPhone 3G sales from its July 18 launch to November 5. As for Apple, the ruling probably won’t be as much of a blow, especially as it has already dropped its exclusivity strategy in favor of selling through multiple operators in other European countries.
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