Speculation on O2 iPhone upgrade policy

Remember back in September 2007 when the iPhone v1.0 came out? There was considerable competition between various carriers to be allowed to be the Chosen One in each country, and to enjoy the exclusive right to sell the iPhone. I'm pretty sure that from O2's point of view, it's been great business here in the UK.

This level of competition allowed Apple to include onerous conditions in the contract, and one of these was a never-before-seen clause to allow a handset manufacturer, that is Apple, to take a share of call revenues. I seem to remember that this was talked of as redefining the power balance between handset manufacturers and carriers, and not to the advantage of the carriers.

Then the iPhone 3G came along, and with it the App Store. Apple now had a new way to make ongoing revenue from the iPhone.

And that has led me to indulge in some speculation. I imagine that the contract clause requiring call revenue sharing was deeply unpopular with O2 and the other carriers. I speculate that, with the introduction of the App Store revenue stream, Apple allowed this clause to be dropped from their iPhone 3G distribution contracts with O2 et al. If true, this might have led O2 to allow immediate upgrades to its customers because it got them off the phones to which the revenue sharing applied, and and moved them back towards a more standard arrangement.

That would have been a special case, though, and there are no such conditions prevailing now.  O2 are following the industry standard practice of making people wait to upgrade until their contracts are finished. This is in some sense understandable and fair enough, although I suppose that it feels pretty random to customers, many of whom had an expectation based on last time.

So,  January then...