Last week, the firm unveiled details of the 3G version of its iPhone and cut the minimum monthly tariff from £35 to £30 on an 18-month contract, effective from July 11.

However, the cheaper deal offers the lowest number of free minutes and texts in the market for the price. Subscribers will get 75 free minutes a month and 125 texts — that’s less than three minutes of calls and about four texts a day.

The cost of the phone will also be reduced to £99 for the original 8GB version and £159 for the new 16GB version.

In contrast, you can get 100 free minutes and 300 texts with Orange for £20 a month. The Nokia N95, which has been billed as a potential rival to the iPhone, comes with the tariff for £99.

O2, which remains the only provider of the iPhone in Britain, itself offers 200 free minutes and 400 texts for £25 a month with a one-off fee of £99 for the Nokia N95.

Anthony Ball of mobile-comparison firm OneCompare.com said: “It’s a bit of a gimmick. The value in terms of free minutes and texts just doesn’t add up.

“Many people who sign up hoping to save money are likely to go over their free usage limits and pay more than customers paying a higher monthly rate.”

Outside their free minutes, iPhone customers will pay 20p per minute while texts will cost 12p each.

The criticism echoes concerns over the original iPhone launched in December last year with many suggesting it was too dear. For £35 a month as well as a one-off fee of £269, customers benefited from only 200 minutes of free calls and texts a month.

Analysts say the new deal offers better value for those who will use their iPhones for extensive internet browsing.

All the iPhone tariffs offer “unlimited” downloads, subject to fair-usage policies, whereas other deals on the market cap downloads at 250MB to 1GB. Internet access is through the O2 3G network or wi-fi hotspots dotted around the country.

The £35 a month package offers eight times more free minutes and four times more texts a month. The flat fee for the handsets remains the same.

You can get the 8GB handset free if you pay £45 a month and the 16GB free if you pay £75 a month. The £45 a month package comes with 1,200 free minutes while the £75 version offers 3,000 minutes. Both versions offer 500 free texts.

Rob Barnes, mobiles expert at comparison firm Moneysupermarket, said: “You’d be foolish to sign up to the cheapest tariff; you're likely to use up your free allowance within a week.”

Unless you are likely to use your phone for internet browsing, analysts suggest other packages on the market.

For a monthly fee of £25, you can get a deal from T-mobile offering 300 free minutes and 600 free texts. You also get a smart phone such as the Lg Viewity or the Nokia N95 for £99 and £119 respectively.

If you already have an iPhone, you can upgrade through www.o2.co.uk/iPhone . O2 will cancel your existing 18-month tariff and allow you to sign up to a new deal, although this option is only available until October 11. You can keep your existing handset too.

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