so basically existing non-iphone customers are being neglected, there is bound to be people in same situation that would love to get a iphone 3G and extend there current contacts for a further 18months. its not like we wanna move providers and go away from 02 all together.
You are not being neglected. If Nokia (or any other manufacturer) released a new phone tomorrow and you were part way through your contract, o2 (or any other network) would not let you upgrade early. You would have to wait till your contract was up.
Now that the iPhone is a regular subsidised phone, you will be subject to a regular minimum term before you can upgrade to it or indeed upgrade it when you want your next new phone.
To those who point at the situation last year when o2 allowed customers to leave their existing contract early, they only did so because by paying £269, you were purchasing an unsubsidised phone and so they were willing to forgo repayment of the subsidy on your existing handset.
Two completely different scenarios.