May 22, 2008 / 11:31 AM / in 11 years

France Telecom says to keep exclusive iPhone deal

PARIS (Reuters) - France Telecom FTE.PA will keep its exclusive deal to sell the new version of Apple’s (AAPL.O) iPhone in France, Chief Financial Officer Gervais Pellissier told Reuters on Thursday.

Apple is widely expected to launch a 3G version of the popular touch-screen, Web-browsing phone early next month, capable of faster data speeds than the original.

“It will remain an exclusive contract in France,” Pellissier told the Reuters Global Technology, Media and Telecoms summit in Paris.

He declined to comment on when the 3G iPhone would be launched or whether the controversial deals Apple negotiated with operators for the first version — in which operators shared their revenues with Apple — would be replaced.

Under the usual European business model, operators buy handsets from manufacturers and subsidize them for consumers who sign up for service contracts with them.

The first iPhone version was sold mainly through exclusive national deals with operators including AT&T (T.N), Telefonica’s (TEF.MC) O2 and Deutsche Telekom’s (DTEGn.DE) T-Mobile. The handset purchase came with expensive carrier contracts attached.

But that business model will change in many countries when the new version is launched, after some consumers and operators — especially outside the United States — objected to the expensive and restrictive terms.

Deutsche Telekom, for example, had been selling the iPhone exclusively in Austria but last week France Telecom’s main brand, Orange, said it too would sell the iPhone there.

The CEO of T-Mobile, Hamid Akhavan, told the Reuters TMT summit on Tuesday that T-Mobile would keep its exclusive iPhone deal in Germany.

(For summit blog: summitnotebook.reuters.com/)

Reporting by Georgina Prodhan; editing by Sue Thomas

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