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THOUGHT: Is T-Mobile Germany's Apple iPhone Monopoly finally at an End?
Posted by Arne Hess - on Thursday, 24.06.10 - 13:40:51 CET under 09 - Thoughts - Viewed 23835x
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Okay, from today, Apple's new iPhone 4 is officially on sale in the U.S. and parts of Europe and all around, friends and folks are queuing in front of the stores to get an iPhone. However, if you know me, you know that I'm not a big fan of the iPhone at all and while there's not too much wrong with iPhone (except that Apple is ignoring some of the well established GSMA and 3GPP standards like MMS for the first iPhone or UMTS video telephony for the upcoming iPhone 4), I prefer more open platforms like Windows Phone, Android or webOS. Nevertheless, since I've worked in the mobile industry for many years and running the::unwired, a good amount of my (German) friends recently asked me if they should purchase an iPhone 4 or not.

No question, the new iPhone 4 is definitely a masterpiece in terms of design and functionality but the design or functionality wasn't the point of my answers since you can always discuss this; coming to different conclusions. What you can't discuss are tariffs and the iPhone monopoly in Germany!

Working for several mobile service providers and carriers in the past, I was always a big fan of the competition. Competition is good, it brought us a wide range of services and quite often innovative tariffs! However, not so innovative are T-Mobile Germany's iPhone tariffs! Compared to many other plans out there, Deutsche Telekom's iPhone tariffs - which you are forced to select from - are far away from being innovative or fair, in other word's - they are simply too expensive. This makes sense for T-Mobile because in the past, the carrier had a mobile phone in its portfolio nearly everybody wanted to get and what happens if you have such a requested product exclusively? Right, you decide the price - not the market and no question, every market requested the iPhone so far - like it was the only mobile phone under God's sun.

The Status Quo
Interesting enough, while in the very beginning the iPhone was in most cases distributed through one exclusive carrier per country only, the iPhone 4 is so exclusive in most countries anymore. As a matter of fact, only the USA (AT&T), Germany (Telekom) and Japan (Softbank) have exclusive iPhone deals in place while in other countries like Italy the iPhone was never exclusive at all, or the exclusivity came to an end before, like in France and the UK.

So what happened in the past? First of all, the U.S. is a sad story for users! If a customer doesn't want to live with AT&T there are not too many alternatives, thanks to the different standards and frequencies used in the U.S. However, in Germany - where we have 4 carriers (all using the same standards and frequencies) - folks either got it regularly from T-Mobile and used it with a T-Mobile SIM card, travelled to Italy in the beginning to got a SIM free and unlocked iPhone there, or bought one from wherever and unlocked/cracked the iPhone to use it with a different carrier than T-Mobile.

When I worked for carriers, I was also responsible for tariffs and therefore I still keep an eye on the tariff-development in Germany and Europe and there's no question, the iPhone isn't the only thing which is premium but also T-Mobile's tariffs for the iPhone are premium!
During the 24 months, an iPhone from T-Mobile Germany costs something around 923.70 to 2904.75 Euro (depending on the contract type) and T-Mobile offers a wide range of different tariffs. This starts with the typical monthly pay as you use plans and goes up to monthly inclusive offers. However, while German no-frill providers are already offering national (and even international) calls and text messages for 9 Cent per minute/SMS only, and competing carriers offer postpaid tariffs for around 15 Cent per minute/SMS, T-Mobile charges insane 29 Cent per minute for national calls and 19 Cent per SMS!

Morgan Stanley backed-up this observation with a comparison of the recent iPhone tariffs between the UK, US, South Korea, France, Germany and Japan.

If UK's US$ 0.04 per minute is the base (and there's no exclusivity in the UK anymore which dramatically lowered the iPhone tariffs), Germany's US$ 0.32 is 8 times more expensive; and normally, the UK and Germany have pretty equal tariffs while mobile data is even cheaper in Germany than in the UK!

The Outlook
Anyway, as it looks now, Deutsche Telekom's exclusive partnership with Apple might come to an end, maybe even sooner than we expect. While in the beginning, and for the first three iPhones, T-Mobile always mentioned its exclusive partnership with Apple, for the iPhone 4 T-Mobile isn't mentioning this anymore. Instead Deutsche Telekom is now talking about an exclusive start-offer which can lead use to the assumption that T-Mobile has a launch-exclusivity (only) which is quite common for new mobile phones but also mean that such an exclusivity ends within the first 1 - 3 months. This is also backed-up by the fact that T-Mobile is only addressing new customers but is ignoring existing customers which might be ready for a contract prolongation. According to reports, current T-Mobile customers will not be able to prolong their contracts before July which means Deutsche Telekom is trying to sell its iPhone 4 inventory to new customers only - to get as many new customers as possible (the existing customers will prolong anyway).

Final Conclusion

You might wonder now what my final conclusion and recommendation is, right? Well, as I said to most of my German friends, I recommend to "hang tight". If you are not one of this "I need it first and I need it now" buyers you might either want to get it from France (unfortunately it's yet not available in Italy), maybe due an upcoming vacation in France or you might better wait a couple of more weeks until the one or the other German carrier might also get it officially! The signs are clear, Apple has no further interest to keep the iPhone carrier exclusivity in place (if you do it right, you can already get iPhones semi-official through Vodafone or O2 Germany) and it wouldn't make me wonder at all if other carriers will carry the iPhone 4 soon as well.

And for sure, these carriers will and have to differentiate from Deutsche Telekom. While it's quite unlikely that a Vodafone, O2 Germany or E-Plus will be able to sell the hardware dramatically cheaper (I'm quite confident Apple keeps an eye on this topic), I'm quite sure T-Mobile's German competitor will launch their iPhone 4 offers with way more attractive tariffs (also resulting in decreasing T-Mobile tariffs).

Instead, ff you already have an iPhone, you might want to consider if you can/want to upgrade it to iOS 4 in the meantime. If you don't have an iPhone yet, you might want to consider if there are not way more attracting mobile phones available or you might even want to wait for Windows Phone 7 (not the worst option at all as far as I can tell you) which will be released anytime in fall.

However, I definitely can't recommend to buy a new iPhone today or tomorrow, not because of the iPhone but mainly due to the way too expensive T-Mobile tariffs which are - in my humble opinion - a real rip-off! And now, it's up to you! Thoughts, remarks, questions? Feel free to add them to the comments bellow!

Cheers ~ Arne

PS: I'm still not an iPhone fan and would neither buy one from T-Mobile nor any other carrier around here in Germany but I did this research to better answer my friends questions as well as for the benefit of the German the::unwired readers.


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