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Tuesday, November 20, 2007, 07:00 am PT (10:00 am ET)

T-Mobile Germany ordered to allow iPhone use on rival carriers

A court order handed down Monday against Deutsche Telekom mobile arm T-Mobile demands that iPhone be sold in Germany unlocked and without a two-year contract, the Wall Street Journal clarifies.

The German carrier has been given to the close of business on Wednesday to alter its marketing (subscription required) of the Apple handset to reflect the Court's demands. The change in conditions will reportedly be valid until another hearing before a Hamburg court, which is expected in two weeks.

For its part, however, T-Mobile is standing firm, claiming that its marketing model for the iPhone is correct. In a statement Tuesday, it said that sales of the Apple handset are continuing and that it reserves the right to claim damages from Vodafone.

As was reported yesterday, T-Mobile rival Vodafone Deutschland filed for the motion because it wants the German court to review T-Mobile's exclusive marketing rights to the iPhone in Germany, which it believes are in breach of local German laws.

"We're not taking any plans to replicate these actions anywhere else, or in the U.K.," a Vodafone spokesman told the Journal. "It's a different regulatory environment."

Specifically, Vodafone is objecting to the iPhone being restricted for use only on T-Mobile networks and also questions T-Mobile's fare packages for the iPhone, which are limited to just three.

Vodafone Deutschland chief executive Friedrich Joussen was quoted on Monday as saying his firm's goal was not to prevent sales of the device but rather to allow for consumers to purchase iPhones without restrictions.

"We want the iPhone to be available to everyone without being tied to a contract," he said.

Although mobile carriers have historically declined to share service revenues with handset makers, the allure of iPhone has allowed Apple to successfully do just that with AT&T Inc. in the U.S., Telefonica's O2 in the U.K. and Deutsche Telekom's T-Mobile in Germany — garnering what is believed to be an approximate 10 percent share of service revenues in each case.

The Journal notes that Apple tried to secure a similar exclusive deal in France with France Telecom SA's mobile operator Orange, but due to French consumer law other telecommunications companies have been selling the iPhone, offering contracts with rival operators Bouygues Telecom, the telecom division of Bouygues SA, and Virgin Mobile.

In its statement Tuesday, T-Mobile Deutschland said it will oppose the preliminary injunction filed by Vodafone.