[Ben]

MOBILE writes that O2 is upping handset prices/lowering subsidies to bring them more in line with the iPhone 3G. O2 are quoted as saying that people want the iPhone but there is still choice, and this move is obviously one to better position the iPhone within the range of other high-end handsets.

O2 expects other networks will follow suit and cut subsidies, but I think they'll see it as an opportunity to reduce churn to O2.

What do I think? Well, I've long believed that handset subsidy is lunacy. So I'm all for bringing it back under control :)

[getti]

If i remember reading it right O2 said a free N95 8GB or C902 will be from £75 a month.

What a joke that is, just trying to squeeze as many iPhone customers in as possible by offering it as a low cost option.

Like them saying 'If you want a free phone you have to get iPhone 3G, else it will cost you much more for other phones'

[Ben]

All it has really done is put the other handsets on an even footing with the 16GB iPhone 3G. The 8GB can still be had for less, but then so can other 'mid range' handsets.