T-mobile may snag iPhone Contract in Europe

T-mobile and Vodafone were in a close race to get the iPhone contract in Europe, but it looks like, T-mobile has emerged as the frontrunner.

T-Mobile has emerged as the frontrunner in the race to secure the exclusive European distribution rights for Apple's much-anticipated iPhone. The hotly contested contract will be worth millions of pounds to the winning operator.

Europe's biggest mobile phone networks, including Vodafone, Orange and O2 owner Telefonica, have been competing for the right to sell the combined music player, mobile phone, e-mail and internet device when it is launched in Europe this autumn. Apple has already signed an exclusive deal with AT&T to distribute the iPhone in the US.

It is thought that the company has narrowed the European shortlist to Vodafone and T-Mobile but sources say the Deutsche Telekom-owned brand is the favourite to land the deal.

T-Mobile has been particularly active in the music area and Gartner research director Martin Gutberlet doubts whether the iPhone, with its iTunes software, would fit with Vodafone's Live! portal.

But he thinks that Apple is adopting the wrong strategy by looking to sign an exclusive deal with one operator. "It would be in Apple's best interests to get more than one operator to distribute the phone because the European market is more fragmented than the US," he says.

Gutberlet believes Apple will sign an exclusive deal with one company but realise its mistake and look for other distributors at a later date. He also points out that T-Mobile has little or no presence in Italy, Spain or France.

Europe's biggest mobile phone retailer Carphone Warehouse was also believed to be in talks with Apple but 3 was ruled out because the iPhone is not yet 3G-compatible. The exclusion was a blow for Hutchison Whampoa-owned 3, which is also one of the stronger networks in music.

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