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Mobile

O2 agrees to U.K. revenue-sharing deal for iPhone

News report says Apple will get 40 percent of revenue that mobile phone carrier makes from customers using the device.

Spanish-owned mobile phone operator O2 secured a deal to sell the iPhone in Britain after agreeing to give Apple 40 percent of the revenue it will make from customers using the device, The Guardian said.

Apple will hold a London news conference on Tuesday where it is widely expected to unveil its plans for the slick, touch-screen device that combines its popular iPod music player, a video player and Web browser.

The Guardian newspaper said on Monday that O2 had agreed to a margin on the retail price but would return to Apple as much as 40 percent of any revenue it makes from customers' use of the iPhone--far exceeding most industry expectations.

The Guardian also said Carphone Warehouse had secured the right to be the sole independent retailer of the device on behalf of O2.

O2 and Carphone Warehouse declined to comment while Apple has declined to give details about Tuesday's news conference.

One telecommunications official questioned whether any operator would strike a deal that would hand 40 percent of revenue to a handset maker.

"I can't imagine any of the operators agreeing to terms like that," the official said. "It is an extraordinary number."

But another source familiar with the lengthy negotiations with Apple said: "I had heard that they (O2) had gone beyond the comfort zone for pricing and that they were willing to go further than others were."

A separate source familiar with talks has told Reuters that Apple is expected to announce a deal with Germany's Deutsche Telekom this week and an announcement handing the French distribution deal to Orange is also expected shortly.

Orange and Deutsche Telekom have also declined to comment.