Wanna free iPhone, guv? Nah, kosher, not a Chinese knock-off

From April 3, O2 will be offering free iPhone 3Gs to customers but, before you rush to their Website, there’s a catch. You have to sign up to pay £34.26 a month for two years to qualify and it only applies to the 8GB version.

It marks a move downscale from the old tariff where you had to commit to £44.05 for 18 months to get a free 8GB phone. Here, too, there’s a change. With this higher tariff spread over 24 months comes a free 16GB model.

Free iphone.jpg

Let’s look at the arithmetic. Under the 18-month tariff you have to pay an extra £96.89 to get the 8GB iPhone. The extra six months on the new tariff will cost £205.56. That means the phone appears to cost an extra £108.67. However, you get six months more of “free” calls and texts which would cost 205.56 under the old tariff. Ergo, as the old Latin scholars would say, the phone is truly free.

On the higher tariff, the extra six months costs the same as the current 18 months plus six extra months so the saving on the 16GB iPhone offer is £57.74 (the current charge on the 18 month offer).

OK enough of the financial blah. Yes, you get a free iPhone but you are committed to a two year commitment. This means that O2 may insist that you stick with your phone for the full duration of the agreement. So 2011 you’ll have a phone that is two years out of date – and that’s a long time in iPhone model upgrades. On the other hand, O2 may offer deals and swaps that allows you to pay less over time or get a new phone mid-term. As Dirty Harry would say, “You’ve got to ask yourself one question: ‘Do I feel lucky?’ Well, do ya punk?”