UK customers can buy an 8GB iPhone for £350, and a 16GB handset for £400. Both plans come with free web browsing for the first year. (After the first year, it's £10 per month for unlimited data.) Pricey. Less pricey than, say, Greece, but still pretty steep.
Tariffs will be based on the "Favourite Place" scheme. A £10 – £14 top-up gets you 500 minutes to any UK landline, £15 – £29 gets you 1000 minutes, and £30 or more gets you unlimited minutes. Texts are 10p each.
Taking your iPhone abroad could get spendy, though: downloading 1MB of data in any EU country will cost three quid -- six outside Europe -- though this is no different than other O2 plans.
O2 also said they will give customers 10 percent of the value of their top-ups over the last 18 months as call time worth up to £200.
Thanks Ash and William for the heads-up!