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BERLIN - Deutsche Telekom AG's mobile unit said Wednesday it would offer Apple's iPhone without a contract to comply with a court injunction, but consumers that opt out of a two-year contract will pay more than twice as much for it.

T-Mobile will start selling the combination smart phone-iPod media player for 999 euros ($1,477) immediately as well as continuing to offer it for the discounted 399 euros ($590) in combination with a two-year contract, the company said in a news release.

The iPhone made its German debut on Nov. 9 — available only with the two-year contract from T-Mobile. The German unit of rival Vodafone protested that practice at a state court in Hamburg.

The court issued an injunction, dated Nov. 12, barring T-Mobile from offering Apple Inc.'s iPhone exclusively with the minimum 24-month contract, and also from selling it only with a so-called SIM lock that prevents users from switching the device to any other operator's network.

T-Mobile said any customer can now also have the SIM lock on their phone removed — including those who have already purchased the iPhone.

The company released statement saying it would abide by the conditions "until the legal situation is resolved." The company could not immediately be reached for comment.

Apple spokeswoman Natalie Kerris declined to comment.

Companies routinely offer phone discounts to customers who sign up for lengthy contracts.

T-Mobile's popular Nokia N95 sells for as little as 199.95 euros ($295.63) with a two-year contract, or 619.95 euros ($916.60) without one.

On Tuesday, T-Mobile said it would appeal the injunction and it also said it reserves the right to consider seeking damages.

Vodafone said it wanted the issue settled.

"What matters is for all these questions to be resolved soon by the state court in Hamburg," Vodafone spokeswoman Marion Stolzenwald said.

Cupertino, Calif.-based Apple's strategy thus far had been to offer its iPhone through an exclusive mobile operator for each region: AT&T Inc. in the United States, O2 in Britain, T-Mobile in Germany, and soon France Telecom's Orange wireless arm in France.

It also has issued software updates that have disabled the workarounds hackers developed to get the iPhone to work on other carrier networks. Apple faces two consumer lawsuits in the United States that accuse the company of unlawfully restricting consumer choice by preventing users from unlocking their iPhones.

The new phone, which also can be used to surf the Web, does not operate on the fastest, so-called 3G networks, but is relying on a different technology called EDGE. T-Mobile argued that it is the only carrier to offer EDGE across Germany.

Source- http://news.yahoo.com/s/ap/20071121/ap_on_hi_te/germany_iphone;_ylt=ApBGviCy0SYV3Xzyz7M4slOs0NUE