iPhone News Updated

Orange, Apple Drop Exclusivity On iPhone In France

PARIS (Dow Jones)– France Telecom SA’s (FTE.FR) mobile unit Orange and U.S.-based Apple Inc. (AAPL) have dropped their exclusivity deals over the distribution of Apple’s iPhone handsets in France, the French competition authority said Tuesday.

The announcement was made by the companies to the French competition regulator and comes several months after the regulator temporarily ruled against the exclusivity deal, in December 2008, as Orange’s domestic competitors Vivendi’s (VIV.FR) mobile unit SFR and Bouygues’(EN.FR) Bouygues Telecom called the deal into question.

The regulator’s temporary ruling was confirmed by an appeal court on Feb.4.

The exclusive deal between Orange and Apple in France was “a new rigidity factor in a sector that already suffers from lack of competition,” the regulator said.

Orange had struck a deal with Apple to be the sole iPhones distributor in France.

The deal would have weakened competition among mobile services providers as Orange has a dominant position on the French market while iPhones are very attractive products and that the exclusive deal was supposed to run for five years, the regulator also said.

Monday, Orange said it will start selling iPhones in the U.K. from Nov. 10, which will end a two-year exclusive contract held by rival Telefonica SA’s (TEF) O2 mobile network.

O2’s exclusive deal with Apple has helped the company to bolster sales, customers and average revenue per user, and catapulted the operator ahead of rival Vodafone into first place as the largest mobile network in the U.K. by subscriber numbers.

France Telecom’s share price was down 2% at EUR16.81 on the CAC-40 at 1420 GMT.

-By Geraldine Amiel, Dow Jones Newswires; +33 1 40171740; geraldine.amiel@dowjones.com; (Lilly Vitorovich contributed to this story)

[Thanks: http://online.wsj.com]

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