UK carrier O2 has confirmed a number of rumored tariff options for the iPhone 3G. Most significant may be the ability to pick up the phone for free with the two most expensive plans: a new £45 per month contract nets the 8GB iPhone for free, or the 16GB model for £59; a £75 per month contract delivers the 16GB version for free. The plans offer 1,200 minutes and 500 texts or 3,000 minutes and 500 texts, respectively.

2.5G iPhone owners already on a £45 per month contract will be able to upgrade to the 8GB iPhone 3G for free on July 11th, through the O2 website. This offer is matched by a 16GB iPhone for £75 subscribers, but those on a £35 plan will have to pay £99 to upgrade their handset. An 8GB phone will also be free through a number of business plans, namely those with iPhone Bolt Ons and tariffs exceeding £26.25. Most renewals will add another 18 months to a contract.

New customers will have to pay £99 for an 8GB phone, or £159 for 16GB. Aside from the aforementioned plans, they will have the option of a minimalist £30 contract, with only 75 minutes and 125 texts. This still guarantees access to unlimited web browsing however, along with Visual Voicemail, smaller roaming rates, and unlimited access to Cloud and BT Openzone Wi-Fi hotspots.

O2 is also preparing a Pay & Go option, but details are being reserved until July.