Report: Apple Plans Nonexclusive IPhone Deal in Italy

Telecom Italia has signed a nonexclusive deal to distribute Apple's iPhone in Italy -- and the phone will be a newer model, compatible with 3G (third generation) networks, according to a report Monday in the Rome daily newspaper La Repubblica.

Apple CEO Steve Jobs has decided to modify the company's distribution strategy of choosing an exclusive partner in each national market and taking a share of the operator's traffic revenue, La Repubblica said. Telecom Italia CEO Franco Bernabe signed an agreement in Cupertino, Calif., at the beginning of April, the newspaper said.

However, Telecom Italia declined to comment Tuesday on the report.

"We haven't been commenting and I can't tell you when we might be likely to do so," a Telecom Italia spokeswoman said.

The agreement provides for the distribution of iPhones compatible with 3G (third generation) networks based on the European UMTS (Universal Mobile Telecommunications System) standard, and the handsets will be sold at a higher price than elsewhere to compensate for the absence of revenue sharing, La Repubblica said. While the agreement is nonexclusive, Telecom Italia has the 3G technology ready immediately, giving it an advantage of several months over Italian competitors Vodafone and H3G, the paper said.

The newspaper put the change of direction down to a realization at Apple that boosting the market share of its Safari browser could be more important than short-term revenue gains from phone sales.

The deal reflects Italy's lead in 3G penetration and mobile Internet navigation, with Telecom Italia having more than double the number of 3G users than the principal mobile phone operators in France, Britain and Spain, the paper said.

The iPhone has been credited with an increase in mobile Internet browsing, with mobile Safari users outnumbering users of all Windows Mobile browsers combined at the end of 2007, according to analyst reports.