Tesco Mobile cuts iPhone tariffs
The cost of signing up for an Apple iPhone fell slightly today after Tesco announced it would offer the basic 3G model for just £100 with a 12-month contract.
The company, which came into the iPhone market last December promising to bring a bit of “Tesco value” to the must-have phone, said it had also cut the cost of the more advanced 3GS handset.
The move is the latest in a series of small price cuts by network providers which mean slowly but surely the cost of buying and running an iPhone has been coming down to more affordable levels.
At Tesco, the cost of an 8GB 3G iPhone now starts at £100. The 16GB 3GS handset, which is faster and comes with longer lasting batteries, costs £200, while the 32GB 3GS model is retailing at £275.
For each deal customers have to sign a 12-month contract at a cost of £35 a month. The price includes unlimited texts, data and Wi-Fi, as well as 750 voice minutes a month.
Anyone willing to pay £45 a month over 24 months can get a 16GB 3GS handset for free.
When Apple launched the iPhone in the UK three years ago, buyers had to pay £269 upfront and sign an 18-month contract costing at least £35 a month. O2 had sole rights to sell it in the UK until last year.
But in the face of a growing number of similar smart phones which are significantly cheaper than the iPhone, Apple has relaxed its pricing and sales controls – a little.
Orange, Vodafone and Tesco now also sell the phones, and in recent months the prices have started to fall.
Tesco was the first to introduce 12-month contracts last December. Until then buyers either had to sign up for an 18-month contract or pay the full price for the phone and opt for a pay-as-you-go plan.
“Tesco Mobile’s iPhone tariffs have been very popular,” said Lance Batchelor, chief executive officer of Tesco Telecoms and Tesco Mobile. “We’ve now made them even better with a lower upfront cost for an iPhone and a new 12-month contract.”
The supermarket giant has declined to say how many Apple handsets it has sold in the past four months but said buyers had been attracted to its shorter 12-month contracts. It is also hoping to bring out a range of sim-only deals for iPhone users who are out of contract.
Rival operator O2 is selling the basic iPhone for £59 but requires buyers to agree to an 18-month, £35-a-month contract, and buyers get far fewer calls included in the package.
The price cuts may be influenced by the fact that the fourth generation iPhone is rumoured to be imminent and could be in the shops in as little as three months.
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