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  5. O2 responds to iPhone 3G S controversy

O2 responds to iPhone 3G S controversy

O2 responds to iPhone 3G S controversy

O2 has played down controversy over its decision to decline to offer early upgrades for owners of current-generation iPhones who wish to switch to the latest version, the iPhone 3G S.

Yesterday, the network, which will be the new Apple device’s sole carrier in the UK, revealed that owners of earlier editions of the handset will have to wait for their contracts to expire before they can upgrade.

The news provoked strong criticism of the carrier from its customer base, who had previously been permitted to upgrade immediately when the 3G version of the phone superseded the first edition.

Responding to the furore, Steve Alder, general manager of devices at O2’s UK division, claimed that the company is unable to allow early upgrades because it would be a loss making enterprise.

He told Tech Radar: "Having subsidised much (or all - depending on tariff) of the price of a customer's iPhone 3G, we simply cannot justify invalidating that contract and subsidise a second device for the same customer.

"Much as we understand the desire of many customers to have the latest version, this would be a loss making deal for O2 and would be a distinct set of business terms for iPhone customers that don't apply to our other customers."

He added: "Contract and upgrade terms for iPhone are exactly the same as contract and upgrade terms for any other O2 device."

Since news of O2’s decision broke, iPhone fans have been organising online petitions to lobby the telecommunications company to change its policy over pricing. Shortly after the announcement was made, a campaign on micro blogging site Twitter was collecting 200 new signatures per hour.

O2 also courted controversy with its iPhone 3G S pricing when it confirmed that it plans to charge owners extra for tethering services, on top of their headline contract rate. Tethering is a new feature of high-end mobile phones whereby the handset is effectively used as a mobile broadband dongle to allow laptop owners to get online.

Under the contract terms for the iPhone 3G S, buyers who wish to use the device in this way will have to pay an additional fee of £14.68 or £29.36 per month. This means that on the £14.68 tariff, an extra £352 of charges would be accrued over the course of the 12-month contract.

The announcement prompted broadband price comparison site Top 10 Broadband to urge potential iPhone 3G S buyers to instead consider an O2 dongle deal which offers the same usage limits but for £20 less per year.

The iPhone 3G S will be available to pre-order through Top 10 Mobile Phones imminently.

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