The iPhone debate

Earlier this month, Orange announced the release of its first iPhone in the UK, a landmark day that finally ended 02’s dominance of the iPhone market.  30,000 iPhones were sold on the first day of sales, breaking a new record for the number of phones sold on a launch day.

It’s also been a good year overall for Orange with it picking up the 2009 Best Network Award at the coveted What Mobile Awards. They’ve also managed to persuade the prolific Twitterer Stephen Fry to use his iPhone on their network, a major PR coup which was immediately reported on their website and boosts the credibility of their service. Recently Vodafone has also announced that they will begin selling the iPhone at the beginning of next year, meaning there is finally emerging a competitive market for consumers wishing to purchase Apple’s illustrious iPhone.

With all three companies fighting for customers, it’s important now more than ever to get pass all the publicity and marketing campaigns to really get to grips with what each company is offering.

Orange have decided not to compete with 02 on price and are offering virtually the same packages, so instead they’ve focussed their marketing campaigns on other areas such as network coverage.

There has been a fair amount of discussion online about Orange’s data allowances, whereas 02 do not state a maximum monthly data allowance, Orange has decided to set a cap at 750MB which raised concerns by many users of unfair terms and conditions.  An unnamed Orange source said however:

“When people reach 750 [MB] they’re free to use as much as they want after that…If we see customers using loads more than that though, then we’ll send them alerts by SMS or phone call, to tell them they’re using more than they should be”

This went someway to calm down consumers who were worried that Orange were imposing stricter data caps than 02, which might have hurt their ability to use the iPhone to its full potential. As a fairly heavy iPhone user I’m sure that 750MB is more than enough for the majority of users, unless you’re watching hours of YouTube videos everyday.

There are worrying reports however that in recent weeks 02 has been sending letters to users who have been using more than 750MB in a month; it appears that it is not just Orange who are clamping down in this area and this may set a worrying precedent which other companies follow.

The major deciding factor between Orange and 02, and even Vodafone, is their network coverage. Ultimately this decides whether or not you can use the many applications requiring 3G access, such as e-mail, internet or the majority of apps.

Ofcom conducted an investigation in July of this year, the result of which was the release of an updated set of maps showing each networks 3G coverage. It shows a remarkable difference between Orange and 02, with the latter having far less coverage than Orange across the British Isles. Both companies have pretty much equal coverage across the big cities such as Manchester and London, however Orange has far network coverage in North Wales, North Yorkshire and the south coast. As someone who spends a great deal of time in Wales, I find my iPhone far less useful there than in Manchester, due to the poor signal I get on 02. These maps show that I would get much better coverage on Orange, and this is certainly relevant to any consumers using their iPhone in similar rural areas.

O2 has also suffered at least four major network outages this year, which caused the whole network to shut down for just over four hours. Many attribute this to the large increase in customers who have joined 02, and the lack of network upgrades by 02 themselves. It is worrying for them as if these outages continue it may present another area where Orange may take customers away from 02.

The other factor in the iPhone debate is what position Vodafone will decide to take in the market. Although there has been no official word from Vodafone other than that they expect to sell the iPhone in early 2010, speculation have arisen that they will announce faster network speeds, something which will benefit customers who do not have access to Wi-Fi hotspots regularly.

Vodafone may also decide to take a different position than Orange and challenge the price and packages of O2. Vodafone have a very strong financial position and as their network coverage is similar to 02 (and therefore cannot compete with Orange), one of their only options may be to challenge them on the price of the packages they offer or even the price of the iPhone itself. It’s too early to tell, but it seems for now the better deal lies with Orange.