O2 backs Apple revenue sharing deal

Peter Erskine, chief executive at mobile provider O2, has come out in defence of Apple's controversial iPhone revenue sharing deal.

Apple has insisted that it receives a share of the revenues made by partner providers from customers using the iPhone.

Almost all mobile operators have balked at the proposal, but Erskine said in an interview with The Times that if sharing revenue brings a "bigger pie to the table" O2 will be "happy to share that pie".

"The revenue-sharing model will play an increasingly important role in the future of converged communications," he added.

Erskine praised the iPhone as an "iconic device", further fuelling speculation that O2 will soon announce a deal with Apple to sell the iPhone in the UK.

When questioned about the potential deal Erskine said only that "nothing yet has been announced as to who Apple may partner with in the UK".

As the revenue sharing model has never been used in the mobile phone market before, many are wary that it may be a slippery slope for operators which already subsidise the cost of mobile phones through the customer contract.

"Some operators feel that [revenue-sharing deals] set a dangerous precedent on the way they deal with handset manufacturers," said Ben Wood, director at telecoms research group CCS Insight.

"History has shown that doing deals with Steve Jobs inevitably results in Apple being the ultimate winner."