Tesco Mobile will offer the iPhone in the run up to Christmas

The iPhone will be available at Tesco Mobile from 14 December, the company has announced.

Its lowest monthly tariff will be £20 a month for the duration of a 12-month contract - but customers will have to pay £222 for a basic 3G 8GB handset.

This works out over the course of the contract to an actual monthly fee of £38.50.

Both O2's and Orange's lowest tariff - £34.26 - is on a 24-month contract and comes with a free iPhone.

The tariff becomes only slightly more expensive to take an 18-month contract and pay about £97 for the handset.

These monthly cost figures represent the tariff plus the cost of the handset split into monthly payments.

Vodafone will also begin to carry the handset in 2010 but has not yet announced pricing details.

Apples and Orange

Although the Tesco averaged cost is the highest among the three, it says the advantage is in offering the shortest contract - and thus the ability to upgrade the handset sooner.

The entry-level bundle deal includes £60 credit each month, which works out to either 300 anytime minutes, 600 texts, or 150 minutes plus 300 texts.

As with the O2 and Orange offerings, the contract includes unlimited web and wi-fi access.

On a 24-month contract at £60 monthly, Tesco Mobile customers will get unlimited calls and texts and a more recent model - the iPhone 3GS 16GB - for free.

The iPhone will also be available to pay-as-you-go customers, for which the 3G model will cost £342.