Pay-as-you-go 3G iPhone due soon

Price announced for pre-paid iPhone but unlimited browsing and wifi included for first year

UK customers are to be offered a pay-as-you-go 3G iPhone from later this month starting at GBP 349.99 (around US$630) for the 8GB model.

O2 , which has the exclusive handset franchise for the UK, will also be selling the 16GB model for GBP 399.99 (around US$720).

The phone will be available from September 16 at O2 and Apple stores, as well as at Carphone Warehouse.

While the price is high, it doesn’t compare that unfavorably with other high-end smartphone handsets on PAYG terms.

There are also likely to be customers happy to avoid an 18-month contract at GBP 30 (US$52) a month.

With PAYG tariffs popular in the UK, the strategy is being seen as a means of O2 broadening its customer base.

The telecoms company said that the price included unlimited browsing and Wi-Fi for the first 12 months after activating the Apple handset.

The company added that users could continue to receive unlimited browsing and Wi-Fi at the end of the 12 month period for GBP 10 per month (US$18).

The “unlimited browsing” is subject to O2’s excessive usage policy.

Existing customers who upgrade to the 3G iPhone may be eligible for a reward, the company has said.

The phone will get a “favorite place” tariff, meaning that for US$20-28 a month you get 500 minutes of calling to any UK landline or other O2 mobile.

The operator said handset activation will be done through iTunes, as applies to contact customers, although some settings will need to be changed before users can access the mobile Web.

Do the sums add up for consumers and will they go for the deal? Would PAYG appeal to other markets? Please send us your comments.

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