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According to a report leaked on Monday, Telecom Spain has signed a nonexclusive deal to distribute Apple's iPhone in Spain -- and the phone will be a newer model, compatible with 3G (third generation) networks.

Apple CEO Steve Jobs has decided to modify the company's distribution strategy of choosing an exclusive partner in each national market and taking a share of the operator's traffic revenue, the source said.

According to a report leaked on Monday, Telecom Spain CEO signed an agreement in Cupertino, California, at the beginning of April, the source said.

However, Telecom Spain declined to comment Tuesday on the report.

"We haven't been commenting and I can't tell you when we might be likely to do so," a Telecom Spain spokeswoman said.

The agreement provides for the distribution of iPhones compatible with 3G (third generation) networks based on the European UMTS (Universal Mobile Telecommunications System) standard, and the handsets will be sold at a higher price than elsewhere to compensate for the absence of revenue sharing, the source said. While the agreement is nonexclusive, Telecom Spain has the 3G technology ready immediately, giving it an advantage of several months over Spanish competitors Vodafone and H3G, the paper said.

The newspaper put the change of direction down to a realization at Apple that boosting the market share of its Safari browser could be more important than short-term revenue gains from phone sales.

The deal reflects Spain's lead in 3G penetration and mobile Internet navigation, with Telecom Spain having more than double the number of 3G users than the principal mobile phone operators in France, Britain and Italy, the source said.

The iPhone has been credited with an increase in mobile Internet browsing, with mobile Safari users outnumbering users of all Windows Mobile browsers combined at the end of 2007, according to analyst reports.