Orange, the mobile phone operator, has resisted the temptation to spark a price war in the market for Apple’s iPhone with its launch next week of the sought-after handset.

Orange will provide a standard 3G iPhone free to customers taking a two-year contract at £30 a month, providing a slightly better entry point than O2’s current offer of £35 a month.

However, the 3GS, the latest and most attractive iPhone model, remains an expensive purchase. The handset will be free to customers signing up to a long-term deal at £45 a month and will cost £175 for customers paying £34.26 a month over two years. That compares with O2’s £175.19 upfront payment on exactly the same monthly price plan.

The mere 19p saving will frustrate those customers who had hoped that Orange would spark a price war after it won the right to sell the iPhone alongside O2. Customers hoping for bigger savings may have to wait until next year, when Vodafone joins the iPhone party.

Instead, Orange will compete with O2 on the basis of network quality. O2 has been a victim of its own success because subscribers who own an iPhone, which O2 has been selling exclusively for two years, have used so much of its capacity that its network has slowed down substantially, particularly in London.

Tom Alexander, chief executive of Orange, said that there has been a swelling of interest among its customers since it was revealed that it would begin selling the handset before Christmas, with 250,000 people pre-registering interest in the iPhone. “We will be matching their enthusiasm with a 3G mobile broadband network that covers more people in the UK than any other operator, a commitment to deliver the best 3G experience on the iPhone,” he said.

The company has also launched a new application based on its ‘Orange Wednesdays’ cinema promotion. The application will provide information about what films are showing at UK cinemas, show trailers and allow customers to locate the nearest cinema offering the two-for-one ticket offer.

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