O2 has confirmed it still has exclusivity on Apple's iPhone in the UK, despite news that Play.com had started selling unlocked iPhones last week.

"O2, Apple and Carphone Warehouse have exclusive rights to distribute the iPhone in the UK. The iPhone 3G is available from O2 on Pay&Go from £342.33 [US498] and from free on Pay Monthly with an 18 month or longer minimum term contract," an O2 spokesperson told technology website TechRadar.

The O2 spokesperson added that anyone buying a Sim-free iPhone in the UK may find a distinct lack of usability including limited internet access.

Unlocked iPhone UK "O2 offers iPhone customers a full service which includes unlimited UK data downloads and unlimited Wi-Fi access, visual voicemail, and a range of other benefits, which you may not get from an unlocked handset."

Play currently lists on its site the 'Apple iPhone 3G 16GB Sim Free / Unlocked 2.0 Megapixel Mobile Phone (Black) - available for £599.99, a £50 saving of the RRP: £649.99 - In stock - Usually dispatched within 24 hours'. The Apple iPhone 3G 8GB is listed at £549.99 is also listed as in stock.

The company told gadget website T3 that the Sim-free deal comes backed with a warranty, and is available to use on all networks, rather than being unlocked from a network.

A Play spokesperson told T3 the deal "is available due to EU legislation ensuring the sale of Sim-free mobile phones" and "comes with a full manufacturer warranty", adding that "the standard Play.com returns policy would apply to this product".

The spokesperson however failed to say where exactly the online retailer is getting the iPhones or indeed how many they have sold other than to say "orders are growing nicely."