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iPhone will be available at Tesco Mobile

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The iPhone will be available at Tesco Mobile from 14 December, the company has announced.

Its lowest monthly tariff will be £20 a month for the duration of a 12 month contract – but customers will have to pay £222 for a basic 3G 8GB handset.

This brings the actual monthly fee to £38.50. The lowest tariff offered by Orange is £29.36 for 18 months with a free handset.

O2’s cheapest tariff works out at £34.76 a month on an 18-month contract.

This includes a monthly charge of £29.38 plus a £96.89 fee for the handset.

The O2 and Tesco Mobile monthly cost figures represent the tariff plus the cost of the handset split into monthly payments; Vodafone will also begin to carry the handset in 2010 but has not yet announced pricing details.

Short contract

Although the Tesco averaged cost is the highest among the three, it says the advantage is in offering the shortest contract – and thus the ability to upgrade the handset sooner.

The entry-level bundle deal includes £60 credit each month, which works out to either 300 anytime minutes, 600 texts, or 150 minutes plus 300 texts.

As with the O2 and Orange offerings, the contract includes unlimited web and wi-fi access.

On a 24-month contract at £60 monthly, Tesco Mobile customers will get unlimited calls and texts and a more recent model iPhone 3GS 16GB – for free.

The iPhone will also be available to pay-as-you-go customers, for which the 3G model will cost £342.

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