An Apple 3G iPhone war has broken out between the world’s fastest 3G network run by Telstra and Optus who this week won a deal to sell the new Apple iPhone. At the core of the argument is the fact that consumers who buy the new 3G iPhone will not get the “best of” the new 3G iPhone on the Optus network that according to Telstra runs at up to half the speed of the Telstra network.

They also claim that 3G iPhone owners will not be able to take advantage of “blisteringly fast 3G speeds when Telstra crank up their network to 42Mbps by the end of this year.     

According to a statement from a Telstra spokesperson, ‘Just this week the Singtel Optus’ CEO was claiming a new mobile would operate on its proposed 3G network but failed to mention it was on the wrong frequency. It’s like someone claiming they can get cable TV without a cable.’

This new mobile is the iPhone of course and a number of Telstra representatives have mentioned to channelnews that they are not sure how the iPhone could even work on the Optus network and that it is directly compatible with Telstra’s 850MHz NextG network.

The Optus statement that got up Telstra’s nose was from Optus chief executive Paul O’Sullivan and included the following: “With Optus, more iPhone users can enjoy 3G services as we expand our network to 96 per cent of the population by December 2008 and 98 per cent by December 2009”.

‘It’s important that consumers understand when they are choosing their mobiles that some of these new phones simply won’t work properly on other frequencies like 900?’, shot back a Telstra spokesman.

Moreover, according to Telstra’s lawyers: “Telstra is concerned that Optus may represent to customers that they can enjoy a range of 3G features and services with Optus using a 3G device and that they will be able to access those services in more places as Optus expands its network,”

A lot of new devices are now supporting 850 and 2100 frequencies as many carriers around the world follow in Telstras footsteps after the launch of the Next G network?, according to a Telstra representative, adding that ?Not all 3G networks were created equal.

“Telstra is the market leader in mobiles and we aim to stay that way, so while not commenting on iPhone or our plans specifically, watch this space.”

So it looks like its all getting nasty over in telco land, however, it is all grist for the mill for Apple as it gets more publicity for its iPhone and at the end of the day, most analysts agree that Telstra will eventually sell the product – frequencies not withstanding and whether Optus and Vodafone like it or not.