UK network O2 are reportedly planning to reduce the sale price of their 3G Apple iPhone handsets later this year.

According a report by MobileToday.co.uk, O2 will begin the price drops in May - just months before the release of a new Apple mobile phone.

The new pricing schemes will see the iPhone 3G available free on O2's £35 and £45 tariffs. Currently the 16GB iPhone is only available free on the £75 per month tariff, with the 8GB model free only on the £74 and £45 deals.