No free upgrades for UK iPhone owners after all

O2 has announced its tariffs for the new iPhone 3G. The 8Gb iPhone 3G will cost £99 on O2’s new £30 per month tariff; the 16Gb model will cost £159. Both models will be free on its highest £75 per month tariff.

Unfortunately, the free O2 upgrade offer for exisiting iPhone owners we initially reported turned out to be untrue. O2 is letting customers break their exisiting 18-month iPhone contract if they sign up to a new 18-month iPhone 3G contract, but that's all they get from the deal. More details after the cut.

O2 is offering a wider range of tariffs for the iPhone 3G than with the original model – and is offering subsidised handsets for the first time. The £35 per month contract for  for the original iPhone remains and has the same voice and text message allowance. It’s joined, however, by three new tariffs, including the entry-level £30 per month tariff. The table below shows the full range:

If you’re an existing O2 iPhone customer still bound by the original 18-month contract, you can break it without penalty if you sign up to a new 18-month iPhone 3G contract. You will, however, still have to cough up for a new iPhone 3G if you opt for anything less than the £45/£75 per month tariffs (according to which capacity you want). So, no freebies.

Of course this will also turn your old iPhone into a fat iPod Touch, but O2 is offering a couple of options to aid with its recycling. First, existing O2 customers on any contract can upgrade to an iPhone tariff without having to sign up for another 18-months. Alternatively, O2 will be offering a PAYG SIM for both the original iPhone and new iPhone 3G, although it’ll be a couple of weeks before it announces the full details.

Tight-wads won’t be able to avoid paying a monthly fee for the iPhone 3G, either. Apple has closed the loophole that allowed people to buy an iPhone and use it without signing up for a contract with their country’s exclusive provider. The iPhone 3G will still be sold online as well as in-store, but you now need to sign up for an iPhone contract as part of the purchasing process.

This is clearly an attempt by Apple to crack down on the grey market for iPhones. How successful it will be remains to be seen, though Apple’s announcement that the iPhone 3G will eventually be available in 70 countries worldwide should go some way to meet the demand for illegitimate handsets.

The iPhone 3G will be on sale from Friday 11 July in Apple, O2 and Carphone Warehouse stores.

[ Apple] [ O2]