O2 has pretty much matched what AT&T is charging for the new iPhone packages by replacing the dollar sign with a pound. I didn’t know the exchange rate was that bad? Oh no, wait a minute, it isn’t!

While prices in the States have gone down, in the UK, they’ve actually gone up. O2, who’s got some serious explaining to do today, has jacked the 16GB iPhone 3G up from £149 to £184.98 if you wish to add the letter S and a slightly better camera. The 8GB iPhone 3G which costs an equivalent £61 in America is £96.89 over here.

The 32GB iPhone 3GS comes in at £274.23 and all three of theses prices stay until you get to the £44.05 per month tariff with 1200 minutes and 500 texts. With the lower packages, you’ll either pay £34.26 per month for 600 mins and 500 texts or £29.38 for 75 mins and 125 texts. Watch those texts, though. One MMS will take away four in one go!

For straight PAYG

• iPhone 3G 8GB – £342.50
• iPhone 3G S 16GB – £440.40
• iPhone 3G S 32GB – £538.30

So, how do you feel about this? Will you be buying? Will you be upgrading and will you be forking out for the tethering bolt-on on top of this?

iPhone on O2