Bloomberg reports that Czech carrier Telefónica Czech Republic AS (which owns O2 and operates under the O2 brand) is refusing to carry Apple’s iPhone 4S and is dropping all prior iPhone models, citing “business terms”. The iPhone 4S page on their site lists the handset as unavailable and provides a link to Apple’s Czech online store instead. Contrary to the report, iPhone 4S is coming to their network November 7, the official web site says (see the screenshot below).

Bloomberg explains:

Telefonica Czech Republic AS won’t sell Apple’s new iPhone 4S and will end sales of all Apple’s models because of Apple’s business terms, Hospodarske Noviny reported, citing Telefonica’s local spokesman Hany Farghali.

A Dow Jones Newswire report from last week claimed Apple and O2 failed to come to terms on offering the device in the Czech market. Telefónica’s spokesperson confirmed his company did not agree with Apple “on mutually acceptable conditions yet”. The spokesperson blamed it on struggling sales in the local market, describing iPhone sales in the country as “pretty small and well below Android models and even still Nokia phones”.

Note that Telefónica was one of Apple’s biggest backers in Europe, bringing the iconic phone to Spain and the United Kingdom first with O2. Of course, “business terms” can entail a lot of things, including the product’s exclusivity, product placement, marketing terms and subsidies.

Boy Genius Report is pointing to a recent report from local Czech newspaper Hospodarske Noviny, which asserted that the carrier is having a major problem with Apple’s high subsidies on the handset, which Sprint CEO confirmed as being $200 higher on a per-device basis versus the industry average.

Telefónica, majority owned by Spain’s Telefonica SA, in 2005 acquired state-owned Český Telecom and its wholly owned subsidiary Eurotel, creating Telefónica Czech Republic AS. According to Apple’s support document last updated October 14, 2011, the online Apple Store is carrying unlocked iPhone in Czech Republic, in addition to Czech operations of Vodafone and Deutsche Telekom-owned T-Mobile, which both start selling iPhone 4S today. We hope Apple and Telefónica will resolve this dispute and that it will not degrade their relationship in the broader European Union region.

Apple is launching iPhone 4S in fifteen additional countries this coming Friday, including Hong Kong and South Korea, where the government this morning conveniently lifted a banon sales of iOS games. With this roll-out included, iPhone will have been available in 44 markets. Apple promised at the October 4 iPhone 4S launch that the device would be available in 70 countries and on a hundred carriers by the end of the year, calling it “our fastest roll out ever”.

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