O2 Prices Up Apple iPhone 3G S, Adds Tethering Tariffs

O2 has announced that the new iPhone 3G S will ship on the 19th June and although has announced that the old 8GB iPhone 3G will see its price drop to $99 on a subsidised contract, the pricing grid released by the Telefonica-owned company has not reflected this.

As it stands, the cheapest contract on 18 months will costs £29.38 although punters will have to fork out £96.89 for the 8GB iPhone 3G, £184.98 for the 16GB iPhone 3G S and £274.23 for the 32GB version. Adding £4.88 to the monthly contract price will quadruple the inclusive messages to 500 SMS and multiply the number of minutes to 600.

The 32GB iPhone 3G S will be available for free only on 24 months contracts with the highest contract tariff at £73.41, which will give you 3000 minutes and 500 UK messages.

O2 has also confirmed that existing iPhone customers will need to pay for the remaining period on their contract over and above the cost of the new Apple 3G S itself. O2 said on their Twitter account that customers will have to head to an O2 store or call them up to see how much it will cost to end their contract.

That could potentially cost certain users hundreds of pounds, meaning that in extreme cases, it might be cheaper for some users to buy a Pay As You Go iPhone instead for £440.40.

In addition, adding tethering to the iPhone will cost an additional £14.68 on top of the monthly contract cost which will bring the cost of some contracts nearer to £90 a month or more than £1000 a year. The cost of tethering will rise to £29.36 for 10GB and for heavy users likely to consume more than the 3GB in the light version.

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Our Comments

People might be complaining but the level of churn is likely to be very, very low. O2 and iPhone users are very unlikely to leave the network once they've been pulled in. O2, it appears, has stopped playing Mr Nice and it will be interesting to see whether its customers can force it to drop prices to avoid any significant consumer backlash - if any.

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