Cellcos warn Apple on embedded SIM plan

Dylan Bushell-Embling
19 Nov 2010

Major European operators may refuse to cut iPhone subsidies if the handset firm presses on with plans to sell phones with an embedded SIM.

Vodafone, France Telecom and Telefonica have privately expressed concerns over Apple's rumored efforts to develop a smart SIM integrated into the iPhone, allowing buyers to choose a carrier at the time of handset activation, FT.com reported.

One senior executive said Apple risked a “war” in Europe over the new activation model.

Operators fear the move would prompt a spike in customer churn as it eases the process of migration, and would lead to a decline in the duration of telecom contracts.

Such a model would even allow Apple to enter markets as a connection services reseller with an inbuilt competitive advantage, the sources said.

Global iPhone sales could fall by up to 12% if European operators refuse to subsidize purchases, according to analyst firm Bernstein.

Apple has not publicly commented on the SIM project, but sources within multiple European operators have reportedly said the company is working with smartcard developer Gemalto to develop the chips.

MORE ARTICLES ON: Apple, EU, France Telecom, Gemalto, iPhone, Telefonica, Vodafone

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