Been away from this thread a bit. Watching what's going on on twitter, O2 have already admitted that the UK wholesale price they pay for the iPhone 3G S is the same as the iPhone 3G. Hence, they've essentially admitted to raising the price on the 16GB iPhone by nearly £30. There's something very fishy going on pricing wise.
Yeah something really fishy is going on. On twitter they have said the wholesale prices from Apple have remained the same like you said. They are now saying that the story on ZDNet with the quote from an O2 spokesperson saying they iPhone is now being subsidised less by O2 is a mis quote and its actually being subsidised more.
How does that work out? Same Apple Wholesale price + being subsidised more by O2 = Higher price than the iPhone 3G at launch.