Tesco offers £1,500 iPhone contract

 

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By Stuart Turton

Posted on 10 Dec 2009 at 10:40

Tesco has unveiled its iPhone pricing, including a tariff costing £1,490 over two years.

Unlike Orange and O2, which offer largely the same contracts and prices, Tesco is offering a radically different pricing policy on the iPhone.

Tesco is offering a one-year contract at £20 per month, or a two-year contract at a hefty £60 a month.

On the year-long tariff customers are given £60 of flexible credit to spend on either text messages or voice calls. However, customers will be asked to pay more for the handset. The iPhone 3G will cost £222, with the iPhone 3GS 16GB and 32GB costing £320 and £407, respectively.

Customers signing their life away for 24 months receive unlimited calls and either an iPhone 3G or 3GS 16GB for free. If they want a 3GS 32GB, it's an additional £50 - bringing the total cost of ownership over 24 months to a whopping £1,490.

A similar package through O2 comes to £1,418.

"[The contract is] catering to those who want unlimited voice and messages," says Geoff Blaber, an analyst with CCS Insight. "We're seen since the iPhone's launch that people will pay a premium for unlimited voice and messages in relation to other phones, and that remains the case."

"To be honest, it's consistent with expectations, there's very little flexibility operators have when it comes to pricing due to Apple's control," adds Blaber.

Unlimited 3G surfing through the O2 network is offered on all contracts. Customers will also be offered free access to BT's Openzone Wi-Fi network for 12 months.

While some people may gasp at the cost of the handsets, Tesco has marked itself out as the first UK retailer to offer 12-month contracts. The shortest contract on both Orange and O2 is 18 months.