LONDON (Reuters) - Vodafone Group Plc said on Thursday it was concerned that the current model of iPhone mobile phones -- Apple Inc's latest "killer" gadget -- did not operate on fast 3G networks. Amid speculation that Apple, the innovative U.S. consumer electronics group, is close to handing a deal to Vodafone's rivals to bring iPhones to European shores, the mobile phone giant said only any deal needed to make sense for shareholders.

"It's clearly a good, software-driven device, but we're concerned about wideband area coverage so that 3G (third-generation) or HSDPA (upgraded 3G) connectivity with the iPhone is something that we look forward to.

"Every product, every alterative, every choice here has a price and we just have to be conscious of what it is that we're doing for our customers and our shareholders," Sarin told a conference call after the company posted strong quarterly numbers.

Analysts expected Vodafone to be in prime position to secure an exclusive, pan-European deal to sell iPhones, which have flown off the shelves in the United States, but warned that Apple was a tough negotiator and liked to dictate terms.

Apple, whose iPhones operate over slower 2.5 generation networks in the United States, is not expected to bring out a 3G version until March 2008, analysts say. And Vodafone has invested heavily in its 3G network and services.

IPhones, which combine Apple's hugely-popular iPod digital music player, a video player and Web browser into a sleek, touch screen device, went on sale in the U.S. in June to the delight of die-hard Apple fans.

Sarin said virtually every mobile company was having a conversation with Apple, but that he could not comment further on any potential decision or announcement.
© Copyright 2007 Reuters.

Photo:
The new iPhone is seen inside the Apple Store in New York, in this file photo from June 29, 2007. Vodafone said on Thursday it was concerned that the current model of iPhone mobile phones -- Apple Inc's latest "killer" gadget -- did not operate on fast 3G networks. REUTERS/Shannon Stapleton