O2 tipped for UK iPhone contract?

Cellphone carrier O2 may have beaten all others to win a contract for the iPhone in the UK, says country's Times. The paper claims that the European provider has been willing to accept terms similar to those for the AT&T deal in the US, including a revenue-sharing system where Apple sees a portion of the subscription costs and an initial price of £300 ($605). O2 would also have to change its network to adopt the Visual Voicemail system, the Times alleges. Carphone Warehouse and other third-party resellers would only get an opportunity to sell the phone after an exclusive run.

Other deals would have Orange offer the iPhone in France while T-Mobile picks up the phone in Germany. Despite its position as a Europe-wide carrier, however, Vodafone has reportedly backed out of negotations for the phone, arguing that Apple's insisted financial terms "were not viable" for the company, the paper says. O2 is the largest provider in the UK at about 18 million subscribers and may have used this to its advantage for the contract.

The company itself has largely remained silent on the matter, though one report claims to have received a denial from an O2 spokesman on the subject.

"This is pure speculation and we are not expecting to announce anything," the representative has reportedly said. "Every network has been linked to the iPhone and now it seems to be our turn."

Apple has yet to make any announcements for a European debut, which is not scheduled to take place until the fourth quarter of 2007.