Is an iPhone revolution about to take place in the UK?

The Orange and Vodafone mobile communication networks have this week announced they are to start offering Apple's iPhone 3G and iPhone 3GS models to UK consumers. This ends Spanish-owned company O2's monopoly on the sale and subsequent line-rental contracts for the iPhone, something which they have enjoyed since the launch of the original model in 2007.

Despite having its three-year-old birthday recently, the cost of having an iPhone in the UK, both in terms of upfront costs and monthly rental, have failed to reduce in line with market expectations. Apple's yearly updates to the device have no doubt helped, but the main reason is undoubtedly Telefonica-owned O2's monopolistic position in the marketplace. Of course owners can unlock their devices for use on competing networks, but they still have to acquire the iPhone in the first place – something which the monopoly helps to make more difficult. The lack of competition keeps both sim-free and used handset prices healthy, no-doubt helping O2's balance sheet along the way.

Whilst Apple, for obvious reasons, don't release sensitive commercial information, it has been widely believed that the O2 deal was a time-limited agreement that was destined to end at some point. The announcement from Orange and Vodafone indicate that such a deal has now concluded.

This can only be good news for consumers. Three competing players in the market will drive down handset prices and expand the available tariff options. One of the most disapproving groups when it comes to current prices in the UK are those already locked into a contract with an older model but looking to upgrade to the latest version, currently the 3GS. You will only get a free iPhone 3GS on a high-end new-user tariff. Those upgrading have no chance, with O2 wanting around £500 from some users just to upgrade a new handset. It can be appreciated that these customers may feel pretty disgruntled. Now they are locked into a contract it is clear they are no longer important. Hopefully this should now change.

The only downside to these events is the wait. Orange have suggested that they will start to offer the iPhone later this year, so hopefully O2 will have some competition during the busy holiday shopping period. Vodafone on the other hand have stated an early 2010 launch. The promised revolution may not happed until next summer, but at least it looks as though it's on its way.