O2 UK has launched a new range of inexpensive SIM-only tariffs aimed at iPhone customers coming to the end of their contracts, at a time when operators are increasingly keen to drive mass-market uptake of smartphones.

The new price plans start at £15 per month for 300 minutes, with unlimited texts, data and WiFi on a 12-month contract, or £20 per month on a rolling 30-day contract. The operator is also offering an unlimited SIM-only plan for £45 a month.

In addition O2 is also offering a £2-per-day Internet Tethering Bolt On, which enables iPhone customers to use their handset as a modem to access mobile broadband services with a computer.

Although the new deals are open to all O2 smartphone users, a spokeswoman explained to Total Telecom on Monday that the new price plans are being pitched towards iPhone customers approaching the end of their contracts.

"Existing O2 Pay Monthly customers who have reached the end of their contract can have their SIM updated over the air to change its tariff. Existing O2 Pay & Go customers will need to come into an O2 store and we will change the SIM for them," said the spokeswoman in an email.

She said iPhone users on other networks will need to have their handsets SIM-unlocked by their existing provider then present the device at an O2 store in order to take out one of O2's new price plans.

It has been nearly 20 months since Telefonica's U.K. mobile arm began selling the iPhone 3G, predecessor of the iPhone 3GS, meaning consumers who snapped up the handset on 18-month or 24-month deals at launch – when it was most expensive – will soon reach the end of their contracts.

During that time O2's exclusivity deal with Apple has ended and its biggest U.K. rivals Vodafone and Orange have since begun selling Apple handsets.

And the MVNO arm of supermarket giant Tesco ahead of Christmas became the first mobile provider to offer iPhones on 12 month contracts, at prices that undercut its competitors.

Although O2 has moved to lower the cost of owning an iPhone in a bid to keep hold of existing customers, the operator in early February said it still saw strong demand for the handset during the Christmas period. The operator doubled its iPhone customer base to 2 million during 2009.

O2 has also launched its cheaper tariffs at a time when both operators and phone makers are keen to drive the mass-market uptake of smartphones.

The iPhone is still a high-end device; however, with touchscreen phones becoming less expensive to manufacture, coupled with the launch of open source operating systems like Google Android, a number of players are hoping to launch low-cost smartphones.

Orange recently told Total Telecom it expects to offer an Android device priced below €150 on prepay in time for Christmas.

Meanwhile the world's second-biggest handset maker Samsung launched towards the end of 2009 its new bada platform. The software has been designed to work on mid-range, as well as high-end, deivces in order to lower the barriers to mass consumer uptake of smartphones.

Its first bada device – Wave – was launched during Mobile World Congress in February. Samsung said it expects to ship around 10 million Waves during 2010.

source:C114