U.K. wireless carrier O2 said Tuesday it would offer Apple’s latest iPhone for free with some plans.

Apple chief executive Steve Jobs on Monday introduced the newest version of the smartphone, which supports wireless carriers’ faster 3G cellular networks, at the company’s Worldwide Developers Conference in San Francisco. Along with introducing new features to make the iPhone more usable for businesses, Jobs also dropped the price for the base model from $399 to $199.

O2 customers who choose service plans costing either $88 or $146.50 a month would get the 8-GB version of the iPhone 3G at no additional cost. The 16-GB version of the iPhone would also be available at no charge with the more expensive subscription plan. For businesses, O2 plans to offer the device at no charge for companies on a 24- or 36-month contract.

Apple announced on Monday a much faster iPhone that’s half the price of the current model.

The news is expected to address one of the biggest complaints about the hugely popular iPhone: That its Internet browsing is too slow. CEO Steve Jobs said the new iPhone, which is based on 3G technology, is 36% faster than top rival Nokia’s N95 smartphone.

As Fortune.com first reported, the new 8-gigabyte iPhone will cost $199 and a 16-gigabyte version will cost $299. Jobs says the new iPhone will be available worldwide starting July 11. It will allow up to six hours of Web browsing and five hours of talk time.

Jobs announced the 3G iPhone, which had been rumored for months, at the company’s annual World Wide Developers conference in San Francisco.

Although RIM hasn’t said anything publicly about it, their current worst-kept secret is that they’re next-gen handset will have a touchscreen, just like iPhone. Code-named “Thunder” the new handset does away with a hardware keyboard completely and is due to arrive in Q3 2008 according to BGR.

BGR posted a mockup of the device (pictured) which is almost an exact knockoff of the iPhone design. It’s all screen and only has four buttons: send, end, BlackBerry and a back key. BGR also claims that it has 3G (EV-DO Rev. C) and GSM HSPA (for international use) and it will launch as a worldwide lifetime exclusive on Verizon and Vodafone.