July 5 (Bloomberg) -- Telefonica SA's O2 wireless unit said it hasn't signed a deal with Apple Inc. to be the exclusive U.K. network partner for the iPhone mobile device.

``No deal has been signed with Apple,'' O2 spokesman David Nicholas said today by telephone from London. ``We don't comment on rumor or speculation.''

The response comes after the Financial Times, citing people close to the talks, reported that O2 is close to a deal to be the exclusive network provider for the iPhone in the U.K. The O2 deal is a blow to Newbury, England-based Vodafone Group Plc, the world's largest mobile operator, which was seen as the frontrunner for the contract, the Daily Telegraph reported.

Apple ran out of iPhones at more than half of its U.S. stores within a week of introducing the device on June 29. The iPhone combines capabilities of the iPod music player with those of a phone handset. Buyers emptied outlets in 10 states, with 95 of 164 stores sold out on July 2, Apple said on July 3.

``We'll bring the iPhone to Europe in late 2007,'' said Alan Hely, Apple's London-based spokesman. He declined to comment on a possible U.K. network partner.

Cupertino, California-based Apple is selling two models of the iPhone, priced at $499 and $599.

San Antonio-based AT&T Inc. is the exclusive wireless service provider for the device in the U.S.

Shares of Madrid-based Telefonica rose 1 cent to 16.56 euros. Vodafone shares fell 4 pence, or 2.4 percent, to 162.1 pence in London.

Apple shares rose $5.58, or 4.4 percent, to $132.75 in Nasdaq Stock Market trading at 4:30 p.m. New York time.

To contact the reporters on this story: Alex Armitage in London at aarmitage@bloomberg.net

Last Updated: July 5, 2007 16:43 EDT