Tesco is set to make serious inroads in the iPhone segment days before Christmas as it manages to under the rest of the competition with a hybrid pay monthly contract that offers the phone for as little as £20 per month with a minimum outlay of £222.
The 16GB iPhone 3GS will cost £320 and the 32GB version, an additional £87. As it is the case for the Tesco Mobile iPhone PAYG option, users will get one year worth of internet access and WiFi for free.
The £20 - essentially a subsidised PAYG model - will provide the users with up to £60 worth of credits which is roughly equivalent to 250 minutes and 100 texts. The total cost over the 12-month contract will be £462 (or on average £39 per month).
In comparison, O2 offers the 3G for £34.26 with 600 mins and 500 texts; the downside being that you will be tied in a two year contract and won't be able to upgrade your iPhone as and when needed.
As mentioned before, Tesco Mobile users will also benefit from Tesco clubcard points which can be redeemed against rewards.
Lance Batchelor, chief executive officer of Tesco Mobile and Tesco Telecoms, said in a statement that "This is a fantastic announcement for us and we're delighted to make iPhone available to our customers. It shows what a serious player in the mobile market Tesco Mobile has become."
As expected, Tesco Mobile also launched an unlimited package which costs £60 per month (we were betting on £45 instead) and provides with a free iPhone, free Web and WiFi and an upper "fair use" limit of £500 (that's enough to make 2000 minutes and 1000 texts).