With the iPhone nearly live across three networks the questioned to be asked is who will win the battle?
So let's look at what's been happening? Well to kick of with mobile phone operator O2 were given the sole rights to the iPhone in the UK and has had a monopoly in the market. However, in 2009 it was announced that the iPhone would be available across two other networks - Orange and Vodafone. This is bad news for O2 as it indicates a price war may follow. Also in 2009 we saw a merger being signed off between T-Mobile and Orange, spelling bad news for the other networks as this would help to create a super network. Also mobile phone networks are frantically trying to keep customers locked in in order to maintain some market share.
The iPhone went live on Orange on the 10th November and is due to go live on Vodafone at the start of 2010 (unofficially in the middle of January).
Costs of the iPhone:
The first question to be looked at is the cost of the cost of the handset itself. On O2 you can currently buy the iPhone 3G S on PAYG for £440.40 for the 16GB model and £538.30 for the 32GB. This compares to Orange which will charge you £440 and £539 respectively - so pretty much no difference in price here. We'd also expect to see these same prices when the Vodafone PAYG deal goes live.
Cheapest tarrif:
Then we can move on to the contracts. We'd hope this is where you would see some more difference in price as networks don't make money by selling phones for less than the cost - they make their money on tarrifs and have different margins so can afford to offer different deals. Well currently if we focus on the iPhone 3G S 16GB model we have the following prices on contract deals:
O2: The cheapest tarrif offered is £29.38 a month for an 18 month contract which includes 75 mins and 125 texts. The phone costs a further £184.98 on top of this.
Orange: The cheapest tarrif offered is £29.36 a month for an 18 month contract which includes 150 mins and 250 texts. The phone itself then costs a further £184.50 on top of this.
So far Orange is winning, offering more texts and minutes with a slightly (very slightly) cheaper phone price.
Most popular tarrif:
O2: The standard monthly tarrif is £34.26 per month for an 18 month contract which includes 600 mins and 500 texts. The phone then costs £184.98 or £87.11 if you take an a 24 month contract.
Orange: The standard monthly tarrif is £34.26 per month for an 18 month contract which includes 600 mins and 500 texts. The phone itself is a further £184.50 or £87 if you take out the longer 24 month contract.
The Conclusion:
There aren't currently any clear differentiators on price - Orange comes in slightly under O2 but this is hardly a price war. We would hope that when it goes live on Vodafone prices would become more competitive due to a bit more fighting between the three. I've been anxiously waiting for it to go live on Vodafone to get mine on Vodafone due to this but I've recently heard some potentially bad news which may stop this price war altogether - it's been claimed Apple have set the prices across the three networks in order to stop the prices coming down. I expect this has come from Apple so that prices remain high and the iPhone remains a 'luxury item' - it's pretty unfair though for all students who just want a better deal.
So who's going to win the battle - most likely it will be Apple...
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