O2 May See Up to 30,000 iPhones Returned as Price War Begins

UK wireless carrier O2 is bracing itself for what may be up to 30,000 returned iPhones as recent customers send back their iPhones to wait for better deals from rivals Orange and Vodafone. Per The Telegraph, the 30,000 customers that bought the iPhone from O2 within the last two weeks are therefore entitled to end their contracts. O2 has stated the company is not planning to offer such users a better deal in order to convince them not to cancel their contract.
O2 customers with iPhone 3G handsets are already waiting out the end of their long contracts, and will join the others in a search for the cheapest iPhone 3GS deals.

On Monday, rival carrier Orange confirmed it will stock the handset as O2’s exclusive two-year deal with Apple to offer the iPhone has expired. The announcement follows months of speculation as to whether other UK networks would be able stock the handset. Vodafone quickly followed in the footsteps of Orange after it revealed Wednesday that it will also sell the iPhone in the UK. O2 responded Wednesday stating its continuing relationship with Apple, but also promoting the rival Palm Pre, for which it has UK exclusivity.

Opening up the iPhone to competition is expected to knock about £5 a month of the contract tariff, says The Telegraph. That would cut the overall cost of the iPhone by about £100 over two years.

Orange is expected to start selling the phone in November, though Vodafone will be restricted from selling the phone until the start of next year.

“There will be a price war,” said Steven Hartley, analyst at technology research house Ovum. “Research shows that in every country where there is more than one operator selling it, it is cheaper. It could be very disruptive, but it depends how Orange play it. If they get really aggressive O2 will have to respond and a full-on price war could start.”

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