Hopes that moving into a multi-carrier strategy in the UK would generate a price war have been dashed by Orange’s announcement of price tariffs matching those of O2. Now the story takes a tragic turn, with the revelation that Orange’s terms and conditions for iPhone service suck too much – even use of Facebook and Spotify could be forbidden under these.

Not just that, but Orange seems happy to use the word “unlimited” in relation to a limited data service with a 750MB cap (so, like, 375 emails with a picture). While it may be permitted to use that word in that way under UK 21st century doublespeak advertising law may be true, but most of us can tell when unlimited doesn’t mean unlimited.

Overall, Orange’s offer at present looks likely to be a huge step forward – for O2.

After all, part of the new UK carrier’s proposition is that it has a better 3G network and better coverage (it does), but what precisely is the point of using an iPhone on that network when you can’t use the applications you want to use on it, and when you need to keep your usage in check under some limited data cap.

What seems likely to us is that those customers who had held off on buying an iPhone from O2 because they preferred Orange will likely reconsider – Orange has sufficiently hobbled its offer that O2 looks like the prime contender, despite its frustrations.

Now, we’re not big marketing types, nor are we CEO’s of any major corporations, nor are we deep inside a corporate management structure, but let’s face it – spending two years negotiating a deal to carry a product and then offering it in such a way that incumbent competitors have a better offer isn’t ever going to be a path to business success.

Now, we know the 750Mb limited-unlimited Orange deal got looked at yesterday, but what Macworld UK today spotted just takes the biscuit.

Look at these terms and conditions governing use of the iPhone on Orange: “Not to be used for other activities (eg using your handset as a modem, non-Orange internet based streaming services, voice or video over the internet, instant messaging, peer to peer file sharing, non-Orange internet based video). Should such use be detected notice may be given and Network protection controls applied to all services which Orange does not believe constitutes mobile browsing."

Pondering these limitations in Oranges limited unlimited but limited deal, a BBC reporter this morning suggests: "It sounds as though services like Spotify, AudioBoo, Ustream and even Facebook messaging – increasingly popular with O2 iPhone customers – will be out of bounds for Orange users."

Way I see it, if I’m going to fight for the right to offer a device which is already known to attract users who like to fully utilise data services, and as part of my pitch for business plan to extol the integrity of my network, then offering potential customers such limited network use is just plain stupid.

Orange must revise its deal before November 10, or make AT&T (and O2) look good.

The thousands of potential customers who signed-up to get an iPhone when it ships through Orange next week may be better off signing a petition in protest at Orange’s Unlimited-but-limited iPhone deal. Because, in the personal opinion of this commentator, it sucks.

Any thoughts out there, people?

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