Australian telecommunications and media company Telstra has agreed to offer its Apple iPhone customers a two-year warranty, after a watchdog stepped in.

Following discussions with the Australian Competition and Consumer Commission, Telstra will provide full two-year warranties for customers who buy handsets on two-year contracts reports The Sydney Morning Herald.

The Telstra two-year warranty agreement had included all manufacturers except Apple, the newspaper notes, with the iPhone maker charging customers extra for an extended warranty.

"Although nearly all major handset manufacturers have agreed to honour full warranties, the ACCC continues to have concerns in relation to warranty issues with the Apple iPhone," insisted ACCC chairman Graeme Samuel.

"Just because the manufacturer's warranty period is up, it does not mean that consumers can be hung out to dry if they are left with a faulty product and on-going service contract."

The ACCC had recently negotiated a similar extended warranty agreement with rival provider Vodafone Hutchison Australia.

"The retailers are saying well we can't negotiate a 24-month warranty with Apple because it's too expensive," Samuel added.

Apple iPhone 4

"The truth of it is they can but it's going to cost them, and of course that cost would then be passed on to the consumer in the purchase price of the phone. Consumers will then make up their mind whether it's a better deal to buy an Apple iPhone or a Samsung or HTC."