Tesco Mobile has announced Apple's iPhone will be available in store from Monday, 15 December 2009.

The Tesco iPhone deal includes a 12-month contract priced at £20 per month for the iPhone 3G 8GB model. Customers will, however, have to pay a higher initial rate of £222 to purchase the iPhone 3G (or £320 to purchase an iPhone 3GS).

The £20 per month tariff includes £60 worth of credit to spend on texts and phone calls. Calls cost 20p per minute, and texts are 10p each with half price deals on five of your favourite numbers. The Tesco Mobile Web site has more information on pricing.

The 12-month contract includes 12-months of free data. The small print reads: "Unlimited Web and Wi-Fi including BT Openzone Wi-Fi (UK) access: fair use policy applies."

The 12 month contract with Tesco works out at approximately £163 cheaper than its rivals. The total cost for an iPhone 3G with Tesco over 12 months is £462.

O2's lowest iPhone 3G tariff is £96.89 for the handset, and £29.38 per month for 18 months. This brings the total cost to £625.73. (For that price you get free data, 75 mins call time, and 125 texts per month). It is worth noting that the O2 tariff covers 18 months, so you are getting six months extra worth of texts, calls, and data.

The arrival of a 12 month plan will come as a relief to Apple aficionados, however. Apple historically updates the iPhone every 12 months (around June). This update cycle has been at odds with the 18 month contract offered by O2, leaving some iPhone owners frustrated at not being able to upgrade to the latest model when it is released.

Tesco is also offering iPhone 3G and 3GS on its Triple Credit Pay As You Go price plan. Pay as you go costs £342 for an iPhone 3G and £440 for a 16 GB iPhone 3GS. As with other Pay As You Go deals it includes 12 months unlimited data.

"This is a fantastic announcement for us and we're delighted to make iPhone available to our customers. It shows what a serious player in the mobile market Tesco Mobile has become," said Lance Batchelor, chief executive officer of Tesco Mobile and Tesco Telecoms.

The tie-up first announced last month, offers the following pricing.

Tesco Mobile is a 50:50 joint venture between Tesco and O2. The company sells exclusively Tesco Mobile branded services in Tesco stores, online and through Tesco Direct, across the UK using O2’s technology and network. The supermarket giant is one of the world's best-known brands.

Dedicated Tesco Phone Shops will number over 100 by the end of 2009 according to the supermarket.

Last year, Tesco Mobile was ranked the number one pre-pay mobile telephone provider for customer satisfaction, according to the J.D. Power and Associates 2008 UK Mobile Telephone Customer Satisfaction Study.