The Hamburg Regional Court today ruled that T-Mobile can continue marketing the iPhone on an exclusive basis, rejecting a petition lodged by rival telecoms giant Vodafone.

Vodafone had sought a ruling to prevent the Deutsche Telekom subsidiary from selling the iPhone locked to its contract, which runs with a minimum term of 24 months. It also criticized T-Mobile for selling the iPhone with a so-called SIM lock, preventing users from switching the device to other operator's networks.

Under the court ruling, T-Mobile is now able to continue selling the iPhone its two-year contract and the SIM lock. After the oral proceedings, the court stated that it "failed to see any breach of the law of fair competition or anti-trust legislation". The written judgment will be served on the parties over the next few days, after which time Vodafone can lodge an appeal with the Hanseatic Court of Appeal within one month.

In a statement following today's ruling, T-Mobile said, "We will be returning to our old marketing model."

Apple Computer's iPhone hit the German market Nov. 9, but was available only through the exclusive two-year contract with T-Mobile.

Vodafone later disputed the offering and obtained a temporary court injunction, forcing T-Mobile to sell the device without a SIM-lock or a service contract. T-Mobile temporarily sold unlocked version for €999 ($1,474), more than twice the €399 ($588) cost of the phone sold in combination with the typical contract.

After the expiry of the two-year period, said a T-Mobile spokesperson today, customers will be able to remove the SIM lock from their iPhones free of charge, allowing the device to be used on other networks.

Vodafone, however, continued its war of words. In a statement, the company said, "If it is possible to sell mobile phones in Germany with such restrictive SIM locks and service contracts, Vodafone still considers this to be bad for consumers. Vodafone will now analyze the judgment carefully and then make a decision on further steps."