O2 has decided to scrap its unlimited data plan in favour of a more open approach to mobile internet limits.

Starting from 24 June (which is coincidentally iPhone 4 release day in the UK) all new and upgrading smartphone customers will be offered bundled data as part of their contracts.

If you spend £25-£35 a month you'll be getting 500MB, £40-£45 will net you 750MB and if you're a big spender and giving O2 £60 of your hard-earned each month you'll get a whopping 1GB to play with.

Jonathan Earle, Head of Consumer Mobile, told TechRadar: "Consumer data usage has doubled in recent times, and this gave us an unsustainable [data] model for the future.

"We're setting this as a similar format to the minutes you get with a contract - the higher the contract, the more data you receive."

Staying unlimited

All the tariffs still come with unlimited Wi-Fi, and all 3G data packages for new and upgrading customers will be unlimited until 1 October, after which the new limits will come into force.

After this point, users will get text messages letting them know when they are reaching their limits, offering them the chance to get an additional data bolt on of 500MB for £5 or 1GB for £10.

However, if you're happy as you are on an existing O2 deal with unlimited data, O2 says it will let you stay on that plan as long as you like, including those that sign up before 24 June.

Based on current usage patterns, O2 claims 97% of its customers would not need to buy additional data allowances, as the lowest bundle (500MB) provides at least 2.5 times the average a customer's current use.

"We know that customers are looking for clarity in pricing as too many offers have clauses and catches which are not easy to understand," said CEO Ronan Dunne.

"With the wide range of Internet based services now available on mobile devices we're providing customers with generous clear data bundles that give customers freedom.

"This enables us to provide a better overall experience for the vast majority of customers and to better manage demand."