Does the UK iPhone Plan Add Up?

An anonymous reader writes "Is it just me or is the UK iPhone deal seriously more expensive than the US deal? If you look at what AT&T offers compared to what O2 offers, you get significantly less for your money in the UK than you do in the States. It's also significantly more expensive than other non-iPhone deals in the UK, which offer similar services. Steve Jobs response to the more expensive UK iPhone is that 'it's more expensive to do business in the UK', but what does that mean? As a UK resident I'm disappointed that we didn't get the same plan as the AT&T plan, particularly the free mobile-to-mobile calls. Is there some element of the UK iPhone service that I'm missing here?"

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[Source: Slashdot: Apple]