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German MVNO to undercut T-Mobile with 600 euro iPhone rebate

German mobile virtual network operator (MVNO) Debitel said Tuesday it plans to offer a 600 euro ($891) rebate to customers who buy an iPhone from T-Mobile Germany but agree to use its wireless service instead, undermining much of T-Mobile's competitive advantage.

Reuters reports that Debitel —which resells airtime it buys from T-Mobile and rivals Vodafone, O2, and E-Plus in Germany —said it has no qualms about paying the difference in price between an unlocked iPhone and one locked to T-Mobile's network if it means gaining new subscribers.

Although T-Mobile had landed an exclusive deal with Apple to sell the iPhone in Germany, it was ordered by a Hamburg court last week to offer customers an option to buy an unlocked version of the handset that would not require a formal two-year contract and could be used other wireless networks in the country.

T-Mobile and Apple agreed to comply, but did so by pricing the unlocked iPhone at a whopping 999 euros in order to deter consumers from forgoing a T-Mobile contract. The two firms charge less than half that —399 euros —for an iPhone tethered to the T-Mobile network.

In a statement, Debitel said it would begin offering through its stores on Wednesday iPhone contracts starting at 40 euros per month for 200 minutes, which is cheaper than T-Mobile's baseline plan of 49 euros for half as many minutes.

"We are happy to offer iPhone buyers the freedom of choice that customers are entitled to expect from a service provider," said Oliver Steil, Debitel's marketing chief.

Debitel added that customers using Vodafone, E-Plus and O2 networks would get all of Apple's iPhone services apart from visual voicemail which will continue to function only on T-Mobile's network.