Why bothering offering iPhones for $199, when you can give away iPhones for free?

That seem to be the marketing strategy of UK carrier O2, who's offering the handsets as an enticement for their £45 and £75 tariffs plans. O2 can afford to do this because quite simply, £45 is a lot of money - $89 in dollars or $148 for the £75 plan.

With an 18 month service agreement that gets you 1200 minutes a month, with 500 texts, visual voice mail, and unlimited data and Wi-Fi for the £45 plan. The £75 version offers the same package with 3000 minutes a month.

If you'd prefer a 16GB iPhone to the 8GB version, that will cost £59 to buy on the £45 plan, and still is free on the £75 tariff. For £30 or £35 tariff plans a 3G iPhone will cost £99 to aquire or £159 for the 16GB model.

But whatever plan you prefer, while 02 might offering up iPhones for free, apparently there's a really high price for freedom.

Via