Vodafone is the favourite to win the European rights for Apple’s iPhone after one of the most fiercely contested battles with rivals since the £22.5 billion auction of 3G rights.

As the iPhone goes on sale in the United States today, intense negotiations between the California-based group and Britain’s main mobile operators neared a climax. Vodafone faces stiff competition for the exclusive rights to distribute the handset in Europe from rivals such as Orange and the German-owned T-Mobile.

However, sources familiar with Vodafone, an £88 billion company, said that it was pushing hard to secure a deal. Its sheer size and spending power should give it the edge. In addition, Arun Sarin, the chief executive of Vodafone, is known to have a good relationship with Steve Jobs, the Apple chief executive. The two have held private talks about a deal.

However, the relatively greater upside for smaller UK players such as T-Mobile means they will not retire from the negotiating table without a furious fight, analysts said.

The iPhone, whose features include a touch screen and Bluetooth, is regarded as a potentially huge weapon for the winning UK operator in helping it to attract and retain high-spending customers.

The phone – which is predicted to retail at about £300 when it launches here at the end of the year – is expected to encourage thousands of mobile customers to ditch their existing contracts to take up with the Apple provider.

Yesterday the potential transformational nature of an Apple deal contributed to an intra-day surge in Vodafone’s share price. Analysts at Credit Suisse said that a successful deal could add up to 8p a share.

Ben Wood, of CCS Insight, the mobile consultancy, said: “The early signs are that in the US the iPhone will be a driver for consumers to switch operators and, therefore, no other operator can ignore this.”

Despite Apple’s size – last year it turned over a fraction of Vodafone’s £31.1 billion in revenues – the lustre of the brand has ensured that it is holding the upper hand in the negotiations.

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