Free! 3G iPhones in UK from July 11th

O2 is offering free iPhones for the more valuable consumer and business tariffs, coming July 11th. Going onto the O2 website its not clear if the tariffs there are the 3G ones - I suspect not, as we are told the 3G phone will be £100.

What is interesting though is that Free! has been dangled this time round, as (i) it gets more attention than naked bodies and (ii) O2 clearly learned from the last release that upfront costs cost them upfront sales.

Current Tariffs are:

Consumer PrePay

- 8 Gb phone free for £45/month tariff, 1200 minutes, 500 texts, unlimited data, 18 month contract
- 16Gb phone free for £75/month tariff, 3000 minutes, 500 texts, unlimited data, 18 month contract


Consumer PAYG

No details as yet


SO/HO Businesses

- 8GB phone free on the £28pm tariff, 500 mins, 50 texts, 24 months contract
- 16Gb phone free on the £84pm tariff, 2000 mins, 200 texts, 24 months contract

Now, if I had the time and inclination I could run some linear algorithms to triangulate the approximate real costs of minutes, sms's and phone costs to give an approximation of which deal is under or over mean, but I don't - and besides, I want a 3G iPhone anyway and they are bound to change - upwards

(Nope - downwards!! - See the update below)

Update - looks like TechCrunch UK has some scoop on this (thanks Ian Betteridge for heads up). As well as a good writeup on his own blog, Ian has commented below that:

Basically, there will be four tariffs: £30, £35, £45, and £75, and the price of the iPhone will go from free to £159 depending on tariff and iPhone model. That basically means you can get a 16GB iPhone for half the price of an old 16GB one, on a contract that actually costs you £5 less a month. Aggressive isn't the word for pricing like that...

All those tariffs including unlimited 3G data, although there's no details on talk minutes or texts. What's really interesting, though, is that they're bundling free WiFi access with not only The Cloud, but also BT Openzone.

Its very interesting that its being priced at Free! and lower ongoing tariffs - some serious learning from the first time round then, plus (I suspect) a major effort to take as many potential switchers as they can early before les autres can come up with alternatives. This I suspect is because:

- It is our view that the pent up demand for the 3G iPhone is quite high in the UK, so I expect this will could be quite a gamechanger in the UK market,
- In the UK an irrationally hypercompetitive market is locked at roughly equal share for the 4 major players plus "give it away" offset deals from 3 UK, Blyk etc. A tip here could send the market dynamics towards the far more stable "3 big guys plus the noise" structure, which means that the "Big 1 and 2" win handsomely, the others all lose.

Note though that Free! is a way of captivating otherwise rational thought, so students of our FreeConomic papers (start here) will realise that something is being given away for a free phone - usually your money in monthly wodges, (but apparently not in this case - we shall see) - and with pre-registering "interest" here the opportunity to give O2 some data about yourself, all so you can learn when you can have one - now there's an offer I can refuse !