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AT&T Drops iPhone 3G S Price, Will O2 Follow?

Gordon Kelly


AT&T Drops iPhone 3G S Upgrade Price, Will O2 Follow?

When it comes to mobile phone costs and tariffs we know the US and UK markets rarely have much in common, but could AT&T have set a precedent here...?

According to The Business Insider, the US telco has relented to a consumer backlash first started on Twitter to make iPhone 3G S upgrades more affordable to existing iPhone 3G owners. Consequently customers will now be able to upgrade from their iPhone 3G to a 3G S for the same $199 (16GB) or $299 (32GB) cost given to new customers without existing contracts.

The catch - there's always a catch - is AT&T is only giving this offer to bigger spenders and refers its customers to "Check Upgrade Options" in its site portal to see how they qualify on an individual basis. Furthermore, the offer will only be available until September for those who do qualify - which seems something of a mess.

So how could this affect the UK? As it stands O2 is already reaping a whirlwind of FAIL for demanding up to £184.98 ($302) for a 16GB iPhone 3G S and £274.23 ($449) for the 32GB edition for new customers. Existing customers need to pay this as well as buying out the remainder of their current contracts plus signing up to a new 18/24 month plan.

The few benefits available now include an O2 'Priority List' which can cut the time you have to wait before you are eligible to upgrade while Carphone Warehouse is giving £100, £170 and £180 cashback for iPhone, iPhone 3G 8GB and iPhone 3G 16GB handsets respectively. Still, with such exorbitant pricing even then it's not the greatest incentive. That said, the same Twitter petition which got AT&T to bend is currently being directed towards O2 (5538 signatures at the time of writing) so could there be hope?

In short: who knows? With the official launch tomorrow O2 may elect to remain quiet for now since stock is likely to be limited anyway. We can tell you one thing though: the network has already scored one major own goal - it would be wise to avoid another...


The Business Insider

via The Inquirer

Twitter O2 iPhone 3G S Petition


June 18, 2009, 9:57 pm

Not being able to break contract doesn't bother me, since that's standard and mine is up anyway! It's those crazy prices that bother me. Haven't O2 heard of an exchange rate? Just because the iPhone 3GS 32GB costs $300 in the US doesn't mean it should cost £300 here! The mad fools. I'd happily upgrade now if O2's prices reflected the real exchange rate.


June 18, 2009, 10:25 pm

"Carphone Warehouse is giving £100, £170 and £180 cashback for iPhone, iPhone 3G 8GB and iPhone 3G 16GB handsets respectively."

Really? Is that what carphone warehouse thinks is a deal? Wow, I might go and stand outside my local carphone warehouse and offer £180 and £190 to people who are looking to cash in their 3G iPhones since they go for around £300 and £350 respectivly on ebay and id like to buy one...

Hell, I might even but two and sell the other for a profit :-)


June 18, 2009, 11:20 pm

Expect people to stay away in droves tomorrow (19th June) at this offer that is too ridiculous to be true.

I suspect that Vodafone's HTC Magic might just take a shot in the arm courtesy of O2 and Apple's pricing. Lets see now, I can buy an iPhone for how much?? Oh look over there, its the HTC Magic completely free. Hmmm, tough call, that ...

Having both of these handsets myself I can suggest that anyone who is put off the iPhone because of its pricing would not be losing out by switching across to the HTC Magic. Apple it ain't, but you'd not miss the fruity one much, if at all, in the process.


June 18, 2009, 11:27 pm

I'll stick to the old crappy 3 network with my 3g iphone since the dev team will be releasing a software unlock soon for the OS 3.0

unlimited network for a fiver a month, unlimited skype, unlimited tethering (I guess)

I can save worth one month grocery by not buying the new 3gs...


June 19, 2009, 12:53 am

xbrumster unlimited my balls it says 1GB which 3 believes is unlimited surfing aahaaahaahaha

try tethering on that


June 19, 2009, 2:22 am

For new iphone purchasers which iphone is the better deal?


June 19, 2009, 2:56 am

just make the PAYG price cheaper. please. i would happily sell my 32GB 2nd gen touch to help cover the cost of a 32GB iphone. really, i would. if it were less expensive.

Oliver Levett

June 19, 2009, 4:35 am

Why the hell should you guys be allowed to break your contract early, and upgrade just because you were stupid enough to buy an iPhone?

You're not special!


June 19, 2009, 3:50 pm

Very tempted to follow O2's suggestion and get a 3GS on PAYG. It would, however, be the most I've ever spent on a mobile.

Apart from my Vertu, obviously. See, it's people like me that make O2 et al think they can get away with charging these prices in the first place ;)


June 19, 2009, 5:10 pm

Why not Oliver!

You were dumb enough to buy a crappy Windows Mobile Phone


June 19, 2009, 5:47 pm

@Ironduke, I quote "it says 1GB which 3 believes is unlimited surfing aahaaahaahaha"

Why singling out '3'? They're one of the more generous ones. T-Mobile's "unlimited" web surfing used to be 500MB, although they may have updated it now.


June 20, 2009, 12:54 am

ooops...oh how does it work that way I wonder? So they can detect whether i am using my phone to access the net or using my laptop? From 3, five pound you can have unlimited data surfing on ur phone, or £15 for 3GB data on ur laptop.

Then if I hack my iphone to tether, then the £0 contract skype sim with unlimited data from 3 would seem most attractive, woundn't it? Paying nothing for the net? literally?

It can't be that good, can it?


June 20, 2009, 5:06 am

No quite that good, no. You have to use 3's custom version of Skype, which is only currently customised for the phones they support, so iPhones and I think most WinMobile phones won't support their Skype. It's possible they're working to extend support to other models, but that of course needs development time and effort.


June 20, 2009, 1:12 pm

brumster they can all tell who's abusing their network. Infact some people on the otherside of the pound have thought of abusing the data plans to get out of their current iphone contracts without settling.


June 20, 2009, 2:15 pm

@drdark, If you have to use their customised phone, then how can they promote simZero as a sim only package? On their website, it says as long as you're using a compatible (can install skype & messanger) 3g phone, you're good to go, though there is a data limit.

On an iphone 3g, since you set the vpn to three.co.uk, you can access internet & using skype etc with unlimited data for a fiver a month. For which I think is not a bad deal for anyone who don't want to get stuck with o2.


June 20, 2009, 2:34 pm

@Ironduke, I am sure o2 an international firm wouldn't let you go easily without paying the rest of the contract.

Likewise I was on Tiscali broadband and playing online games a lot, then they restricted my bandwidth so I had to wait for 2 month until my contact finished. Ditched them quick.


June 20, 2009, 4:51 pm

I have just read a review on another site and I have to say...there are enough tweaks in this revision to actually make me want an iPhone (and I am someone who perversely avoids anything overhyped because I hate jumping on the hyped-up bandwagon...plus it never had HSDPA and other things...so I have deliberately avoided the jesusPhone in the past). As a user experience it seems hugely better than my O2 XDA Serra (HTC Touch Pro).

I'm curious though how O2 will charge for the tethering - will they require an app to enable it? I use my HSDPA modem equipped XDA as a backup net connection for my PC and it works fine - connects over USB, select Internet Sharing and away you go at broadband speeds (depending on getting a decent signal!!). Nothing's ever appeared on my O2 bill (I'm on an unlimted data plan anyway), I've never had to pay an extra subscription to "tether" my current mobile. It just works. Does anyone know anything about the tethering option for the iphone?

Actually to be honest the biggest thing putting me off getting one of these is the thought of signing up for another 18 months with O2...I miss the good old days of being with Orange and their good customer service....


June 20, 2009, 4:54 pm

BTW re: pricing vs the USA, I gather the minimum tariff on AT&T is enough to give most people a shock-induced nosebleed. the overall lifetime cost of the iPhone in the US is actually higher or similar enough to make no difference.

and also, a friend of mine showed me an Excel sheet showing it's cheaper to get the iPhone on a £45pm tariff and drop to £35pm after 9 months (per contract!), than it is to buy on a £35pm contract!

O2's pricing is mystifying. Someone please tell me they're losing their exclusivity on this phone soon...


June 21, 2009, 2:49 am

@gdawg304 I wished the same along time ago...

the more power one has, the more corrupted he becomes..


June 21, 2009, 5:44 am


I didn't say you needed a 3 phone, I said their version of Skype is custom-made (thus priority has been given to the models 3 currently sell, though I'd expect them to extend support later). It doesn't use the regular data connection but actually calls an automated number and connects through that; wouldn't know the technical details.

But at present, if you have an iPhone or WinMobile phone, I'd say the 3 SimZero offer is not for you.

For other phones, it's best to check their help pages for the "skype on 3" phone model checker. It's under their faq pages if you dig deep enough under the Skype questions.

Alternatively try going to a 3 store and asking to be sure (do NOT bother calling or emailing Customer Service as they're useless).


June 21, 2009, 5:02 pm

@dardark hmmmm.. I had a look at 3. Like you said skype on 3 is a custom-made software. They also provide a link to download it to your mob. I guess there is only one version for the iphone though. Give it a pass.

Once the OS 3.0 unlock is out, I'll work on the tethering on 3 and see how it goes... wish me luck.


June 21, 2009, 7:52 pm

Good luck :).

And let us know if it works as there's a lot of confusion over on HotUKDeals about which phones will work with the SimZero sims as well.

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