I’m sure you’ve heard that T-Mobile are giving iPhones to some customers in the UK. As with the unlocked iPhones available on Play.com, these are grey market imports that are not locked to any network. T-Mobile customers will apparently be offered an iPhone 3G if they spend £75+ per month and threaten to leave.
Initially, this will only affect a small number of high spending customers. And, it has to be seen in context of T-Mobile trying to maintain subscriber numbers – in order to make themselves more attractive if the network is sold.
But for the first time, you can now get an officially-supported iPhone in the UK on a network other than O2. Are we about to see iPhones available on other networks as well?
It’s important to remember that this T-Mobile offering will only be for a small number of retention deals, so it’s pointless comparing any pricing to regularly-advertised tariffs. I’m not even sure if they are the 8Gb 3G or 16/32Gb 3GS. And let’s ignore for a moment that T-Mobile carries the iPhone officially in other markets. This move is likely to annoy Apple, and there could be some manoeuvring on the part of O2 and/or Apple to stop grey market imports, as Levis did when Tesco imported and undercut the price of their jeans.
There have been plenty of rumours that other carriers are going to get the iPhone, as early as October. All the main carriers (but not MVNOs) have existing relationships with Apple, and sell the iPhone in territories outside of the UK. And I’m sure they’d like to sell the iPhone in the UK as well. But O2 are maintaining that their exclusive deal will continue.
But exclusive on what exactly? Other networks may get the iPhone, but possibly only the older model, the iPhone 3G (although there may be a 8Gb 3GS model on the way). O2 may maintain their exclusivity on the 3GS – but I don’t think that’s really crucial in terms of sales. The 3G sold pretty well, despite its limitations, and I don’t think that the 3GS has that many extra features to make it stand out above the older model to your average customer (maybe with the exception of the improved camera). So I think the 3G on competitive tariffs will sell pretty well.
Competition is a great leveller. O2 losing their exclusive deal to sell the “iPhone” (the 3G/3GS distinction being irrelevant to many potential purchasers) will bring tariffs down. But it’s not just the headline monthly tariff of bundled minutes and texts that is of interest. Competition will also come in the form of:
- Bundled Wifi access
- Tethering thrown in (I’m sure that 3, as the most data-centric network, would consider that)
- iPhone offered unlocked / unlockable at the end of contract
Not to mention PAYG pricing, although the up-front purchase price of the device is likely to remain the same, adhering to the no-discount policy enforced by Apple on their goods.
O2 has had well publicised data network outages, and is generally thought to have worse 3G coverage than other operators. Coupled with their policy of offering no concessions to existing iPhone 3G customers who wanted to upgrade to the 3GS, what can they do to stop churn? Remember, there are quite a few customers who upgraded from the original iPhone to the iPhone 3G on 18 month deals, which will be ending in January 2010. There’s nothing to keep many of these customers – except that they’re still locked to O2 on their iPhone 3G as O2 won’t unlock them even at the end of contract.
If they don’t keep the iPhone as an exclusive, what should O2 do to stop churn?
- Offer well-priced upgrades for existing customers to the 3GS
- Lower the monthly tariffs
- Offer to unlock existing iPhone 3G customers at the end of contract
However, the possible increased availability of the iPhone has to be seen in the context of lots of high-featured touchscreen phones coming out Apple, in my opinion, needs to make the iPhone more available especially in very competitive mobile markets such as the UK.
For example, the Samsung Jet is free on Vodafone with a 5 megapixel camera. On paper, it looks like a match for the iPhone, but doesn’t have the accompanying ecosystem, or any decent way of syncing it with the Mac. But most people don’t care about that. If they do, then Android devices, especially, are gaining mindshare and slowly gaining marketshare as well. Now is the time for Apple to make the iPhone easier to get hold of, if they want to take a serious proportion of the UK’s high-end mobile subscribers.
My personal take is that I’m likely to hang on with my iPhone 3G until the next model is announced in June 2010. But for all the new iPhone customers, hopefully things are about to get a bit cheaper 