O2 offers iPhone free on £35, new Apple phone imminent?

Is O2 is clearing stock ahead of a new model of the iPhone?

Nick Spence

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O2, Apple's mobile phone partner in the UK, is to offer the iPhone 3G for free as part of a new contract deal available from next month.

The move is thought to help encourage new users to sign up and shift stock of 3G phones in preparation for a new iPhone rumoured to be available in the next few months including speculation on a new mid-range ‘nano-style’ device.

Earlier this week Apple introduced iPhone 3.0– the next generation operating system for the iPhone – promising over 100 new features.

From 3 April, customers who sign up to the 24 month tariff can get the 8GB iPhone 3G for free at £34.26 per month and the 16GB iPhone 3G for free at £44.05 per month.

On the 18 month contract the 8GB iPhone 3G costs £96.89 for the £34.26 per month, 16GB iPhone 3G costs £155.61 for the £34.26 per month, or £57.74 for the £44.05 per month.

A break down of price plans is available on the O2 Digital News Centre blog.

"The iPhone has been hugely popular with over one million units sold in the UK," said Peter Rampling, Marketing Director at Telefónica O2 UK.

"This new 24 month tariff option will meet the demand of customers who are looking for added value in exchange for committing to a longer contract."

Meanwhile AT&T will begin selling iPhones without requiring a two-year contract also from next week, although at a price point – the 8GB iPhone for $599 and the 16GB iPhone for $699 - that makes a contract appear more attractive.