Unlocked iPhone

Germany. In a legal tussle with Vodaphone, T-Mobile will offer an unlocked iPhone for sale with no transport plan as part of the initial purchase. Particulars –

Appleinsider reports that Vodafone on Monday ‘obtained a court order that requires rival T-Mobile Germany to sell Apple Inc’s iPhone handset to Germans without a service plan.’ Specifically, according to DowJones, Vodafone according to their spokesman is ‘questioning the iPhone’s exclusive use in T-Mobile’s network and the use of the device being limited to certain fees within T- Mobile’s subscription offerings. Vodafone isn’t generally opposed to T-Mobile’s exclusivity contract with Apple, but wants to have these new sales practices examined. The restraining order doesn’t aim at a total sales stop.’

In a response to the court order, T-Mobile today said they would continue to offer the iPhone on a 24 month contract for €399 but would also now offer an unlocked version of the iPhone for €999. Additionally, Reuters reports that T-Mobile ‘will also allow those customers who bought an iPhone since Nov. 19 to unlock the device free of charge so it can be used with other SIM cards. However, that will not enable customers to make use of all the functions that the music-playing and Web-browsing device offers.’ It’s not clear from this statement whether the ‘unlocked’ iPhone will be crippled, however network specific features like visual voicemail likely won’t work.

Now here is the eye popping piece — the cost. So in Germany you can get an IPhone two ways, with or without a transport plan. With a plan — 399EUR. Without a plan — 999EUR. 600EUR difference. Folks, you of course realize that the disparity is going to be made up somewhere, right? But of course in the transport plan. Just run the numbers. On a 24 month contract the spread is going to be made up at roughly 25EUR per, not including any NPV discounting associated with it. So the buyer has agreed to a 25EUR base cost + the transport costs. And when the contract is completed? Well I don’t know about Germany but here in the US the cost of my cellphone bill does not go down. So that base cost is going into the carriers pocket as gravy.

ThirdPipe has suggested repeatedly that it would serve the consumer over the long term that they pay the full cost of the handset up front. Get out of the CPE rat race. Doing so would force the transport costs downward as it would reflect the true costs and not associated subsidization as we have now in the industry for the CPE. But for this to be effective it has to be applied to the entire industry across the board.

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