O2 launches UK iPhone price war with SIM-only tariff offer

The iPhone price war has at last begun in the UK, with Apple’s original exclusive partner, O2, introducing a new low-cost tariff for the device, a SIM-only contract.

The move is O2’s attempt to meet competition from Orange and Vodafone, both of which also now distribute the iPhone. Tesco Mobile also offers the device, under arrangement with O2.

The new SIM-only deal means customers who already have an iPhone can adopt a SIM-only tariff beginning at £15 per month for 300 minutes, unlimited UK texts, data & Wi-Fi on a 12-month SIM-only contract, or from £20 per month on a 30-day rolling contract. Unlimited UK calls, texts and data are also available from £45 a month.

O2 says that iPhone customers who want to use their iPhone as a modem can do so and not pay more than £2 per day with O2’s newest Internet Tethering Bolt On.

Sally Cowdry, O2 marketing director, said:  “Customers’ habits are changing, with more texts being sent and data being used than ever before. We have listened to our customers and introduced a range of new tariffs with unlimited calls, texts and data offering real value for money.”

The move to meet the cost-conscious consumer market comes scant hours after Apple CEO Steve Jobs told shareholders last night, “Apple requires stability in the world. People aren’t going to worry about which laptop to buy if they can’t afford dinner, can’t afford to send their kids to school, can’t afford textbooks. There are things much bigger than us that are out of our control. So we try to just do the best we can.”

All three UK iPhone carriers originally stated their intention to avoid any kind of price war, but the new SIM-only tariff indicates that one way or another, carriers won’t sacrifice their chance to hold a substantial chunk of the iPhone market in a double-dip recession.

A battle on price was predicted last year, when Ovum analyst Steven Hartley said, “There will be a price war. Research shows that in every country where there is more than one operator selling it, it is cheaper.

“It could be very disruptive, but it depends how Orange play it. If they get really aggressive O2 will have to respond and a full-on price war could start.”

O2 also launched new mobile broadband tariffs: Customers can now choose a 1GB per month tariff with unlimited Wi-Fi on either a 30-day contract or an 18-month contract.

This is in addition to O2’s existing 3GB with unlimited Wi-Fi tariff for £15 per month.  In addition, customers signing up to any 18-month 3GB mobile broadband tariff will receive their first 3 months free.

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