Loss of iPhone exclusivity in France grates with FT

Posted by Chris Garland Thursday, February 5th, 2009

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Orange parent group France Telecom (FT) may be “shocked” by this week’s court ruling that it will lose exclusivity rights to offer Apple’s iPod in France, but it can hardly come as much of a surprise.

The incumbent, which began selling the iPhones in December 2007, has sold more than 600,000 devices since their debut in France on Nov. 28, 2007 but has been faced recurrent problems since then, reportedly including tension with Apple itself.

Considering the already significant presence FT has in France, opening up the market to other players for a high-end device such as the 3G iPhone would seem to be beneficial to French subscribers by forcing it to lower prices.

FT has complained that it was “shocked by [the] decision,” it believes is “regrettable,” but it would arguably be the loss of its monopoly on the iPhone: 48% of FT’s 100,000 iPhone sales last December were tied to new Orange subscriptions.

CEO Didier Lombard said at the time that he thought this “had a positive image impact […] and led to a very positive commercial result.” Given such comments, it is hard to see how the court decision ruling that the operator must share the iPhone market is based “on an accumulation of incorrect elements.”

Tensions with Apple also originated from the French legal requirement that the iPhone be sold both with and without contracts, which FT argued at the time undermined its exclusivity rights – another indication that new entrants will create a more competitive market, but one which FT is evidently unhappy with.

The question now is whether operators in other markets will seek to question the legal basis of operators’ exclusivity deals with Apple.