Vodafone likely to lose out to O2 in iPhone roll-out

Vodafone looks set to lose out to rival O2 and other operators as Apple adopts a slower European roll-out of the eagerly awaited device.

Following better than expected sales in the the US, negotiations over the European launch have intensified.

Reports yesterday said that O2 was close to securing a deal for Britain.

People close to the negotiations said Apple was planning to launch simultaneously before the end of the year in Britain, France and Germany with other European countries getting the iPhone on a phased basis in 2008. An O2 Ireland spokesman would only say that no deal has been done with Apple and declined to comment further.

Although it has not publicly made any comment, Vodafone is known to be keen to secure the deal and, with its pan-European presence, had been seen as the front-runner to land the iPhone contract for Europe.

The company has failed to find the success it expected with its internet-like Vodafone Live! service despite heavy investment in development.

Sources close to the company say that, rather than try and keep users on its own portal, it is now cutting deals with major internet players such as Google, Yahoo!, eBay and MySpace.

Vodafone has a network in more European countries than any other operator which would have made it appealing to Apple. But when the computer maker introduced the iTunes store in Europe in 2004, it did separate licensing deals in each country.

Speculation that Vodafone was close to a deal was stoked when a senior Vodafone executive gave a talk at Queens University Belfast making heavy use of iPhone imagery.