iPhone Believed Powerful Enough To Topple Entire Network Providers

The all-conquering power of the iPhone was further proved yesterday, as the French court of appeal upheld a complaint from mobile operator Bouygues Telecom that it wasn’t fair to let Orange have exclusive rights to provide the iPhone in France. The judge felt that allowing just one operator was a “restraint on competition”, and that consumers are “deprived of freedom of choice of providers if they want to buy an iPhone”.

Bummer for France Telecom, who own the Orange brand in France, and who spent loads of money bidding for and marketing the iPhone only to have its rivals sneak up in its slipstream. But really, this story isn’t about competition law generally – it’s about the specific and potentially crippling popularity of the iPhone. You didn’t see a lawsuit about the Orange-exclusive Levis 3G phone, because it was rubbish and no-one cared about it; having sole rights to the iPhone on the other hand is like having the keys to the royal mint, and has been deemed a position so powerful that it can seriously damage your rivals. Bouygues filed the complaint not after Orange’s bid succeeded, but after the iPhone sold 600,000 units in a year in France.

Will the case set a precedent for this kind of litigation? Will T-Mobile, with its exclusive rights to the G1, realise that it’s got the raw deal in the smartphone market? In the States, the fourth quarter of last year saw 621,000 new customers join T-Mobile, whereas AT&T, the exclusive provider of the iPhone in America, saw 2.1m new customers, of which 1.9m were iPhone subscribers.

Back in 2007, Apple received a few lawsuits from iPhone users forced to go with AT&T, who were unable to use their current network but reeeeally wanted an iPhone. There then followed last year some more lawsuits from people saying that AT&T’s network wasn’t strong enough to hold all the 3G-draining iPhone users, and that outages of the network meant that Apple and AT&T were breaking the terms of the contract. These piddling personal beefs were never heard of again, but maybe this France Telecom thing will make Verizon, T-Mobile et al think again.

Then again, it could just be a one-off. Germany didn’t see anything wrong with T-Mobile having exclusive rights to the iPhone back in 2007, throwing out a lawsuit from Vodafone very similar to the one made by Bouygues. Meanwhile AT&T is set to extend their exclusivity to 2010, and Apple is planning to get people to ditch their iPods and trade up to iPhones, and still make pots of cash in the process. The march continues.

Posted by Ben Beaumont-Thomas in Sci-tech | February 5, 2009 1:32PM |