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Vodafone Getting in on UK iPhone Party

Vodafone_epsVodafone announced today that it will begin selling the iPhone in the UK beginning in 2010, according to Reuters. The news comes on the heels of an announcement from France Telecom’s Orange yesterday that it would also start selling the popular smartphone, following the end of O2’s exclusivity deal this month. Orange will reportedly be offering the device for sale in three weeks.

Vodafone also will be selling the device in Ireland. It will begin selling the phone in both places at the end of this year. Analysts see the move as a huge boon for Vodafone’s business, which had been suffering in the British market because of O2’s exclusivity deal. If you’re not keen on waiting, you can already pre-register online for iPhone updates through Vodafone’s web site.

Once it becomes available on Orange and Vodafone, the iPhone will be officially offered by three of Britain’s five mobile operators. The exponential increase in competition could have significant benefits for the consumer, if price wars ensue. The iPhone is already one of the most heavily subsidized devices on the market, though, so it’ll be interesting to see how far into profits cellular network operators are willing to cut to win consumer favor.

The iPhone is such a valuable property because of its data-intensive nature. Cellular providers are seeing profits from talk and text steadily decreasing as talk time becomes cheaper and plans become more competitive. Look at the U.S., where Sprint recently introduced free calling to any mobile on any network for those subscribed to its top-of-the-line Everything plans. Data use has become the real money maker for wireless companies, since customers still regard it as a premium and are willing to pay more for it.

Bernstein analyst Robin Bienenstock emphasized the role of the iPhone in O2’s recent success:

We estimate that the iPhone represents more than 100 percent of O2 UK’s growth, 6 percent of subscribers, 14 percent of service revenues and 13 percent of earnings before interest, tax, depreciation and amortization. In the UK, O2 has consistently taken contract share from competitors (in particular Vodafone) since its sole distribution of this iconic brand began.

Clearly, Vodafone wants to take that contract share back, and now it has the means to do so, when it begins to offer the iPhone 3G and 3GS through 13 of its operating companies early next year. Hopefully, this is a taste of what’s to come for U.S. markets somewhere down the line. As Liam mentioned yesterday, the real show will take place when these three vie for consumer attention following the launch of whatever iPhone iteration Apple (s aapl) has in store for 2010.

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