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O2 Makes a Mess of iPhone 3G S UK Pricing

Gordon Kelly


O2 Makes a Mess of iPhone 3G S UK Pricing

The launch of the iPhone 3G S garnered a rather apathetic opinion from me when it launched last night while you guys have seemingly been split down the middle. There is however a new announcement in relation to the handset which we can all agree upon...

O2 has released its pricing for the new Apple phone and it's ludicrous, barmy, batty, recession-timed-madness that makes me so cross I'm going to simply copy and paste in this table to try and cut down on more adjectives.

In short, yes these run in stark contrast to O2's generous iPhone 3G tariffs which appeared one year ago almost to the day. In fact, whereas a flagship 16GB iPhone 3G in 2008 would cost you just £59 on a £45pm 18 month contract now the replacement 32GB flashship iPhone 3G S clocks in at a jaw dropping £175.19 on the same tariff.

Perhaps worst of all are the deals for the 'affordable' 8GB iPhone 3G which supposedly received a 50 per cent price cut yesterday to attract new users into the smartphone sector. Well SUPRISE! O2 hasn't changed the tariff at all and will still charge roughtly £99 (£96.89) for the handset on both £29.38pm and £34.26pm 18 month deals - the exact same rate it launched at 12 months ago. Thanks O2.

Think that's the end of it? Oh no. O2 will charge £2.94 for downloading each megabyte of data inside the EU and £6 per megabyte everywhere else. That new MMS functionality will come at the cost of no less than four SMS messages and tethering - oh my word tethering - costs an extra £14.60pm for a 3GB allowance or £29.36pm for a 10GB allowance. This is the exact same price O2 charges for its mobile broadband packages and at least there you a) get a free dongle and b) won't kill your iPhone battery in the process.

There's more.

Pay & Go pricing. Now let's put this in context: currently the 8GB iPhone 3G sells for £342.54 and the 16GB version costs £391.47 not an inconsiderable amount. Now the apparently 50 per cent cheaper 8GB iPhone 3G will sell for - yep - £342.50 with the 16GB and 32GB iPhone 3G S demanding a quite simply potty £440.40 and £538.30 respectively.

Feeling depressed? O2 has one final killer. Speaking from its official Twitter page the network has confirmed it will be abandoning the early upgrade options it offered to customers for the original iPhone and iPhone 3G launches. Now "Every O2 customer needs to pay to end their contract if they want to upgrade early." How much will this be? "The early upgrade cost is likely to be monthly cost x (multiplied by) months left on your contract."

So let's get this straight with an example. An early adopter of the 16GB iPhone 3G who bought it at launch in June will need to pay up the six remaining months of their contract - say the midrange £34.26pm tariff - then up to £184.98 for a replacement 16GB iPhone 3G S before signing up to another £34.26pm 18 month deal. In total that's a £395.54 upgrade cost combined with a new contract.

I've said a great many positive things about O2 over the last 18 months - all of them richly deserved - but it has not so much dropped the ball here as collected the ball, its chain, a few pro wrestlers and body slammed them onto the toes of existing and potential customers slap bang in the middle of the worst recession in nearly a century.

(No, that table insertion didn't really stop the adjectives - did it?)


O2 Apple iPhone 3GS


June 9, 2009, 4:27 pm


That's all I have to say.


June 9, 2009, 4:28 pm

I know you won't print this no matter how much I edit it, but seriously, the only thing that went through my mind as I was reading this article was "Ars*r*pe".


June 9, 2009, 4:28 pm

I do think the iPhone is a nice piece of kit (i don't own one) but O2 has always been a factor in me not getting one. I agree with everything in the article. It will be interesting to see what impact this has on upgrade sales.


June 9, 2009, 4:31 pm

might probably be fairer to crack the screen and ask for a replacement instead


June 9, 2009, 4:36 pm

Good old O2, trust them to make a mess of things.

I honestly cant believe the lowest tariff, 75 minutes and 125 texts for 30 quid a month?

are they on some kind of mind altering substance?

pluss you then have to pay between 96 and 274 quid for the phone!


June 9, 2009, 4:36 pm

Its clear that Apple have run with the ball on the Apps front and blinded all the normobs with their advertising. There's not a single person in my office this morning isn't considering buying an iphone, apart from those who already own one!

Personally, this pricing is pushing me further away from Apple and more towards an android based phone. I'm looking forward to seeing the pricing of the Samsung i7500.

Also, although the android phones don't have the quantity of apps of Apple, its interesting that they do have one called "Documents to Go" which you can use to edit MS documents. I've yet to see it, but I don't know of any other mobile platform that allows for document editing.

Finally, here's something bizarre: The Open Handset Alliance's (ie Android's) biggest supporter is Google, who are the world's leader in what? And what do you think is the one really useful website feature, which is missing from the www.android.com site? Go figure!

dave doubledecks

June 9, 2009, 4:42 pm

LoL calm down Gordon! I agree the pricing is very steep, but no one's forcing you or anyone else to buy one, or to upgrade your old iPhone. No doubt they will still sell like hot cakes to those with more money than sense.


June 9, 2009, 4:43 pm

File this one under Conspiracy Theories: O2 is also getting the Palm Pre. Could it be possible the company is pricing the iPhone in such a way that everyone goes for the Pre instead? We'll know more once 02 releases its pricing plans for that device.


June 9, 2009, 4:45 pm

I believe the word I'm looking for... actually the word I'm looking for can't be published so let's go with arrrrrggghhhhhhhhhhh.

Finally, FINALLY, I was ready to get an iPhone. The hardware was what I wanted it to be, the software is superb, the apps are getting stunningly good and I'd be getting a decent deal out of that £35 contract thanks to tethering. I was genuinely happy last night that I could finally get what I've wanted for two years now. And then O2 winds up and delivers the mother of all steel-toed boots to the groin.

How on earth can they justify this price? It's, what, £60 more for the 32Gb model than they pay in the US? It gets obliterated by everything else and the 8Gb, which should have been taking the fight to the Nokia 5800 with ease, is now a complete flop. Surely they're going to have to change this before launch if they want to get any takers for the top end at all or we're just going to see a repeat of the original iPhone fiasco in the UK.

Andy Vandervell

June 9, 2009, 4:49 pm

This is just embarrassing isn't it? One has got to assume, too, that Apple would have had some input on the pricing (if only to rubber stamp it), so Apple could be just as much to blame. Last year the iPhone 3G was actually good value, that definitely can't be said now.


June 9, 2009, 4:49 pm

Well, this just serves to further convince me that I will never buy an iPhone...

And, hang on, you say *just* £99 on a £45pm contract for 18 months for the original? That's still horribly excessive...


June 9, 2009, 4:49 pm

My plans to finally get an iPhone = Gone.

Tim Sutton

June 9, 2009, 4:51 pm

Not even Sean Bean could convince me to buy Apple usually, but I was starting to consider an iPhone for my next handset.. thank you O2 for bringing me to my senses :-)

Those prices really are very silly.

On a side note, how many iPhones have actually been sold here in the UK? I've seen just 3 in the wild since launch.


June 9, 2009, 4:53 pm

Annoyingly, even if O2 lose their exclusivity, I don't want to move away from them as a provider. Hopefully between now and the iPhone 3GS release, they will amend their pricing because of the amount of negative feedback they'll get.

This seems like quite a software-themed update from Apple all-round though. Quite looking forward to OS3.

font: inherit on this textarea, please?

Ricky Archer

June 9, 2009, 4:55 pm

OMG! I tracked the WWDC as it went and started rubbing my hands with anticipation when the iPhone and OS 3.0 were covered. Well done to Apple for putting right some things (MMS, Copy & Paste etc). I really like the 'Push to Talk' and software like Tom Tom's, very clever and so I was eagerly awaiting release dates. Well I can wait until next week but having seen what O2 has done I am very very disappointed. Last year for the 3G launch I queued with many people from about 5.30am on launch day - sad I know but there was a great atmosphere and everyone got along well. This year? No early upgrade option that doesn't rely on you selling a kidney to fund it and no rabid desire to go join what I expect this time will be a very short queue. OS 3.0 is released 2 days before the 3Gs and I like many I suspect, will satisfy myself with that. Do I want the new iPhone? Desperately! I am a massive fanboy of the iPhone/Touch, am I prepared to pay through the nose to get it? No. See you (maybe) in 5/6 months O2 when my contract us up. Quick question, when no one upgrades will O2 realise their horific pricing/contract error and do the right thing? Lets face it, most uptake on the 3Gs will be existing iPhone owners. Rubbish O2, you are rubbish!


June 9, 2009, 4:57 pm

BOFH_UK - I agree with your comments.

I was all ready to sign up for 18 months but I'm holding fire now. I appreciate it's a great phone but the price is extortionate compared to every other phone on the market.

Could O2 be wringing every last penny out of the iPhone before they lose exclusivity I wonder?


June 9, 2009, 4:57 pm

Bummer! Just reached the end of my Vodafone Blackberry contract and naively thought I'd wait for the new iPhone. I've been using an iPod Touch as a VoIP phone for six months now and, although previously I thought I'd never go over to the dark side, I have to concede that it's a lovely, lovely device. I was actually looking forward to just carrying one gadget around instead of two but this pricing strategy is a nasty shock. Did O2 make any money at all out of the last deal they did with Apple, I wonder? Or is there where they finally hope to recoup the money they shelled out for those 3G licences? Seems greedy or just plain desperate to me, but perhaps the cult is so strong that they've pitched it right. Like Bluepork says, an awful lot of people will still want one...


June 9, 2009, 5:02 pm

Its delusional to blame O2. Apple has made its money of the iphone cult and no one complained. O2 probably didnt make much money last time around and now they are cashing in. I cant blame them - the iphone cult has demonstrated its willingness to pay up. So hey, enjoy.


June 9, 2009, 5:06 pm

I was all ready to get the new iPhone a day ago, but the pricing is ridiculous.

I will be steering clear.


June 9, 2009, 5:10 pm

As acgs1 points out, that just rams home how expensive smartphones are, even without this recent nonsense from O2. I mean, even the cheapest iPhone on the cheapest contract will set you back £625 over 18 months. Is an iPhone really worth that much more than a £160 iPod Touch?

I realise that the unlimited data contract and line rental are worth a fair chunk of that sum, but that's a difference of £465! Really?!?

I'd pay good money for a phone that I considered to be reasonable value, but this is way off the mark.

And don't get me started on those tethering charges...


June 9, 2009, 5:11 pm

Just like BOFH_UK, I have been itching to get the new iphone when announced - then splurge a bit more on an up to date TomTom. When I read these prices, though, it makes me go all Victor Meldrew!!

I need to wait till late August before upgrading and can only hope there is enough backlash between now and then that the prices are a bit more sensible.

I tether my Win Mobile (O2 Orbit 2) now and again when away from home and use some of my 200MB/month Web Bolt On and just consider it part of the service. So now I have to pay £15 a month for a few MB of tethered data? That is a step too far. Why not just put a cap of 100 or 200MB tethering and the rest of the data only via the iphone?

Must sign out now before I get too worked up :(

Charles 2

June 9, 2009, 5:11 pm

I was all set to get an iphone but luckily for my wallet Apple decided against a nano size phone and an OLED screen. O2 have sealed the deal with an immense price tag. With 02 getting the Pre I needn't bother with this network.

I too will be going down the Android route although I am mighty tempted by 3's Skype deal...

evil mart

June 9, 2009, 5:11 pm


I quickly jumped out of my old contract in March so i can get the new one on release day.

But in no way am i going to spend £275 on a phone and then £35 a month for the next 18 Months.

Do o2 honestly think they'l shift them all on release day as well.

We can only hope its a mistake. (Although unlikely)

Govind Singh

June 9, 2009, 5:14 pm

@Bluepork. Here's a video of Documents to Go for Android: http://www.youtube.com/watch?v...

I also agree about the Samsung i7500. Is this phone coming to O2?


@Ripsnorter. Good point. I'm looking forward to seeing what the pricing is like for the Pre. My 2G iPhone contract has come to an end and the new version looked promising for a second. I just can't believe that tethering and MMS costs so much. I thought Apple was going to release multiple versions of the phone?

Kashif Bhatti

June 9, 2009, 5:15 pm

Ok, well, (as per my comments yesterday on the iphone), I'm now thinking....NO.

Software upgrade it is, and wait for 6 months, to either go back to (better reception) vodafone or move on an Android phone.

Sorry Apple.

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