T-Mobile can sell iPhone with contract

HAMBURG, Germany (Reuters) - Deutsche Telekom (DTEGn.DE) scored a victory in a legal battle with rival Vodafone (VOD.L) over sales conditions for the coveted Apple (AAPL.O) iPhone, which T-Mobile sells exclusively in Germany.

A German court ruled on Tuesday Deutsche Telekom's mobile unit can make customers who buy the music-playing and web-browsing device take out a T-Mobile contract as well and may continue to offer the device with a locked SIM card.

A locked card prevents the device from being used on rival networks.

Deutsche Telekom shares were up 1.2 percent at 15.27 euros by 2:04 p.m., outperforming a 0.3 percent dip in the DJ Stoxx telecoms index .SXKP.

It secured an exclusive deal with Apple to sell the iPhone in Germany, where Apple has no stores. Customers had to sign up to a 24-month T-Mobile contract costing a minimum of 1,176 euros (842 pounds) in order to buy the 399 euro phone.

Vodafone had won a temporary court injunction preventing T-Mobile from locking the iPhone's SIM card and offering it only in combination with a T-Mobile contract.

T-Mobile said it planned to return to its original sales conditions for the iPhone as soon as possible.

Vodafone has also lost out to Telefonica's (TEF.MC) O2 in Britain and France Telecom's (FTE.PA) Orange in France.

In Britain the iPhone costs 269 pounds on top of an 18-month contract costing a minimum of 35 pounds per month.