In what seems like an almost unprecedented move, O2 and AT&T have collectively managed to annoy their respective UK and US customers in one go following yesterday’s announcement of the new iPhone 3G S.

They’ve both come up with new pricing plans that serve to do one thing to their loyal (not to mention, extremely cash-strapped) customers: screw ‘em!

O2’s iPhone 3G S woes

O2 always insisted that its users take out a 2 year contract on the iPhone. This is absurd in its own right, but even more so when you consider that most phones are upgraded by the manufacturer every 12 – 18 months, and the iPhone is no exception. The iPhone 3G S is the third generation of the device, which was only launched back in 2007!

As such, most iPhone users looking to upgrade will already be on an existing contract. Last year, when the iPhone 3G was released, they were able to upgrade for free. Not this year.

No, despite this being the harshest economic climate for decades, O2 has decided that if you want to upgrade, you’ll have to pay off the rest of your contract (i.e. monthly cost x months left on your contract) – which, if you have a year left, will cost you £411.12.

O2 aren’t done with you yet, though. If you want the 32GB iPhone, and you want one of the two lower priced payment plans, you still have to pay an additional £274.23 on top!

Then you have to take out another 18 – 24 month contract, meaning you’ll have to go through the same pain next year when the 4th generation iPhone is launched.

Still not finished, though! The original iPhone comes with “unlimited” data transfer service thrown in for three. However, it can’t be tethered (i.e. used as a modem to connect your laptop to the Internet).

The iPhone 3G S can be tethered, though – but only at an extra cost of £14.68 for a paltry 3GB a month. You know, the same data that you could have for free if it was transferred directly to your iPhone, rather than then sent onto your laptop!

This sucks. No, this royally sucks! But not quite as much as AT&T sucks for its US customers!

AT&T’s iPhone woes

AT&T has also decided to overcharge its customers to upgrade. If you’re 1 year into your contract it’ll set you back $399, while 2 years will set you back $499 (which is pretty much the cost of the phone unlocked!)

That’s bad enough. But add to that the appalling service that AT&T provides its customers (poor coverage, no MMS support for another 6 months and no initial support for tethering until an ambiguously-defined “sometime in the future”), and things start to look bleak indeed.

Worse still, AT&T might have shot themselves and Apple in the foot. AT&T are only contracted to have the iPhone exclusively until 2010, after which Apple is free to negotiate with other carriers.

However, as TechCrunch writer MG Siegler points out, if you had the choice of buying an iPhone on a different carrier in a year’s time, or buy one now that’ll lock you into a costly contract with a poor network – who’s going to buy one now?!

In short, the myopic tactics of both O2 and AT&T have served to screw the customer at a time when they really can’t afford to be screwed, and also screw Apple as well.

These pricing policies don’t just hurt the networks – they hurt the image of the iPhone brand itself, which is fast becoming known as the most overpriced compass on the planet (for that’s pretty much the only added feature of the new iPhone 3G S!)

Apple already have a poor reputation for locking its users into products. That’s OK when your products are good. But when the service is bad, the price is so high as to be exploitative, and you have no choice whatsoever – that’s when people start walking.

And with Nokia, Microsoft Windows 6.5, dozens of Android devices and the Palm Pre all fighting for the customer’s wallet, there’s no end of alternatives for those not prepared to pay these ridiculous prices.

[Source: TechCrunch, Here]