O2 has announced a "radical shake-up" of its entire range of consumer Pay Monthly and small business tariffs, including those for the iPhone.

Available to existing iPhone customers from today, but not customers using other mobile phones until their contract comes up for renewal, O2 says the new tariffs will be "simple and straightforward" as well as their most competitive to date.

However pundits will be asking if it's not the rumoured poor sales for the iPhone in the UK that has prompted the changes.

All O2 Pay Monthly tariffs will now work on six price points where customers choose the text and minute bundle which most suits them as well as having the ability to bolt-on unlimited data packages and access to The Cloud hotspots.

The new tariffs will be available from February 1st 2008.

Once the price point is chosen, customers can then customise their tariff by adding text and call bolt-ons.

For iPhone customers, both existing and new, this means more texts and minutes than the previously pitifully uncompetitive offerings.

The three current tariffs for iPhone will be brought in line with the minute and text bundles offered on the new tariff structure.

iPhone customers on a £35 per month contract will get three times more minutes and more than double the number of texts than before.

The new £45 iPhone tariff gives the same amount of minutes and texts as the former £55 tariff so customers who were on the £55 tariff can either save £10 per month or take the new £75 tariff with 3000 minutes and 500 texts a month.

Customers who are currently on the £55 price plan will be dropped down to the £45 offering.

All iPhone customers will continue to receive "unlimited" data browsing and access to The Cloud's Wi-Fi hotspots.