Tesco Mobile will become the first iPhone network provider that doesn't tie you into a contract for more than a year.
The supermarket's communications arm will begin selling Apple's popular 3G and 3GS handsets from Monday with monthly costs starting from £20 on a 12-month contract.
The other two networks to sell the iPhone, Orange and O2, only offer minimum 18-month contracts (see the Cheapest iPhone guide).
Prices are broadly similar between the trio on their basic monthly tariffs.
The basic Orange and O2 18-month tariffs are more expensive per month (at around £30), but come with a cheaper 16GB 3GS phone (at £185, making the total £545 over 12 months). Tesco charges £320 for the same handset (£560 in total).
However, Tesco offers slightly more minutes and texts. All three networks offer virtually identical handset costs on pay-as-you-go deals (at up to £538).
Tesco's £20/month deal - available both online and in store from Monday - includes £60 of credit, which buys 300 mins OR 600 texts per month or a combination of the two. It also includes unlimited internet browsing for a year.
The 16GB 3GS handset is free if you take out a two-year, £60/month contract with Tesco. It also comes with unlimited calls, texts and internet for high users.
O2 and Orange charge around £75 a month for a similar deal, but make those deals available over 18 months rather than Tesco's 24 months.
Tesco does not offer a mid-range deal as both Orange and 02 do (eg, £35 a month for 600 mins and 500 texts with the handset at £185).
Vodafone will become the fourth provider to sell the iPhone when it enters the market early next year.
MoneySavingExpert.com consumer products analyst Archna Luthra says: "While high upfront costs mean Tesco's £20 deal isn't market-leading, it's a worthy competitor to O2 and Orange's near-identical tariffs.
"Of course, Vodafone is yet to show its hand, so those seeking the best deal should wait for its prices before diving in."
Launched in 2003, Tesco Mobile is a joint venture with O2, and piggybacks on the latter's network for coverage.
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