According to reports in the Daily Telegraph, the mobile operator is close to securing a deal with Steve Job’s firm just a day after Orange announced it had broken O2’s exclusivity deal.
The firms had been “highly secretive talks” and a deal was signed late into the night. With Vodafone joining Orange and O2 selling the iPhone, word is out that a price war is not too far away.
“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,” he said.
Hartley said the contract tariff for the iPhone could come down by about £4 to £5 a month, which would save up to £120 off the price of the phone on a 24-month contract.
The 16GB iPhone 3GS costs £96.89 on a £44.05-a-month contract with O2. Orange refused to give details of its terms but hinted that it would be cheaper than O2.
O2 has sold more than one million of the smartphones and has allowed the operator to increase its market share.