Official : O2 Cuts Free iPhone Monthly Contracts, New Models Coming

O2 has officially announced that it will be giving the 8GB iPhone for free on a £34.26 monthly contract with the 16GB model costing £44.05, the previous entry price for a free 8GB iPhone.

Last week, Mobile Today reported that O2 would be cutting Apple's iPhone contract prices. Customers will get 600 free minutes and 500 free texts (as well as unlimited browsing) on the first one saving punters a £96.89 charge. Those going for the £44.05 contract will be getting 1200 mins and 500 texts plus a £57.74 saving.

In both cases, the contracts last 2 years although you should be able to upgrade to the latest iPhone assuming everything remains constant (i.e. O2 is still the exclusive iPhone network).

O2's marketing director, Peter Rampling, said that "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".

The new prices will be introduced on the 3rd of April on O2 and at Carphone Warehouse and it is likely that O2 will introduce the next generation iPhone within 100 days. O2 hasn't announced any price reduction for the iPhone 3G on Pay As You Go.

AT&T has already confirmed that it will be selling contract-free iPhones (ed: That's Pay as you go for us) next week which means that network providers could be looking to clear their stock before the third version of the iPhone is launched.

You can follow ITProPortal.com on Twitter @itproportal.