when the iPhone first launched in June, with the news that AT&T will apparently provide Apple with some of the service revenues that it makes from its iPhone subscribers.

If newspaper reports out of England are to be believed, O2 -- the operator that will carry the device in the country -- is cutting Apple a similar sweet deal, offering to cough up 40 percent of the money it earns from iPhone users.

What else can the iPhone deliver? 18 month contracts.

Cutting down "churn" -- when a customer switches from one network to another -- is top of the operators' hit-list

Anything else?

with a device that is set up to promote Web browsing and music downloads, Apple can help O2 encourage more users to spend money on mobile services other than talk and text.

Handsets are normally given away "free" in the UK, with the operator bearing the cost. If Apple can get users used to paying for their mobiles, both the network and handset makers will thank them