Pay-as-you-go iPhone 3G due in September

O2 will start selling iPhone 3Gs for use on a pay-as-you-go plan on 16 September, the company has announced.

The phone will cost £350 for an 8GB version and £400 for a 16GB model, and will be available through Carphone Warehouse and Apple outlets as well as from O2.

O2's price for the phones includes free, unlimited browsing and Wi-Fi in the UK for the first 12 months. After that, customers will pay £10 a month. However, O2's usual 'excessive usage' policy applies, meaning Wi-Fi and data use is restricted to "private, personal and non-commercial purposes", according to the O2 website.

The iPhone 3G was launched on 11 July, with Apple promoting the phone as more focused on the needs of business users. At first, it was available to customers who agreed to sign up to an 18-month contract with O2, with prices ranging from free to £159, depending on monthly tariff.

O2's pay-as-you-go phones will be set up initially on O2's 'Favourite Place' tariff, which provides 500 minutes of calls to a UK landline or O2 phone for a minimum monthly top-up of £10-14, though other plans are available. Tariffs may include additional charges for calls abroad or to phones on other mobile carriers, or for texts. Existing O2 customers who switch to the iPhone 3G may be able to get free minutes as an upgrade award, the carrier said.