Having gained hugely from its exclusive rights to sell the iPhone in the UK, O2 has responded to growing competition from Vodafone, Orange and Tesco Mobile with the launch of a new SIM-only contract.
Under the new deal, UK customers who already own an iPhone can choose from a range of SIM-only tariffs starting at £15 per month for 300 minutes, unlimited UK texts, data and Wi-Fi on a 12-month SIM-only contract, or from £20 per month on a 30-day rolling contract.
Sally Cowdry, O2 marketing director, said: "Customers' habits are changing, with more texts 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."
More controversially, Cowdry said that the company would also introduce a new £2 per day Internet Tethering Bolt On. "We know our iPhone customers want to snack when they are using their iPhone as a modem. We have always been the home for texts and now want to extend that to being home for data."
Vodafone at the beginning of February introduced new SIM-only price plans that it claimed were "great for iPhone customers." Available from £25 a month they offered "unlimited" texts--subject to a fair usage policy, 1Gb data and BT Openzone Wi-Fi access.
Separately, O2 said it had added over one million contract subscribers in the UK last year to take its total customer base to 21.3 million, a 5.1 per cent increase year-on-year.
For more on this story:
Vodafone achieve early hit with iPhone, Nexus One bombs
O2 doubles price of new iPhone, blames lower subsidies
UK iPhone price war opens with free add-ons
O2 to crack down on iPhone tethering cheats