Lets break it down to look at the cost of owning an iPhone 3G on o2 payg.

Firstly, we need to get the payg and contract iphones on a level playing field, which means adjusting for the difference in contract periods.

Cost of iPhone 3G 8GB – £349
Monthly topup      -  £15
*Data charges (6 mths) -  £10

The PAYG sim required for use on the iPhone has free data and wifi usage for 12 months, reverting to £10 a month after that. I have put the data charges in for 6 months to compare the cost of the iphone for 18 months, as that is the length of the contract iPhone.

So for 18 months -

Iphone 3G Cost        349
18 x £15 topups        270
6 x £10 data charges     60

Cost of ownership       679

Cost per month        37.72

The cost of the handset has priced itself out of the market, as the contract version includes more inclusive minutes, and most importantly, free text messages and free calls to any network.

So, judging by the fact most people wont have £349 lying around spare to buy the iphone 3g payg, bag yourself a free iphone 3g and dramatically reduce the cost of ownership !

Still fancy a contract iphone ?

Then sign up here for a free iphone 3g voucher and save yourself the cash, go direct to the apple store and give them your voucher !