3, the mobile phone operator, has announced that from the 17 June, customers will be able to get the UK's first £0 a month contract service.

Called SIM ZERO, the operator hopes to make its money from people making phone calls rather than paying an up front fee to get connected.

As a lure to entice new users to ditch other services, 3 will offer free Skype-to-Skype calls and IM in the hope that customers will make the odd "real" phone call.

Where once the £35 a month contract was common place, prices are now falling", says Andy Nuttall, Head of Pay Monthly.

Customers of the contract will also get free voicemail in the UK for the 1 month minimum term contract.

Call prices will be 20p per minute for all standard calls, 10p per text, and 30p per MB of data within the UK.

The offer won't come with a handset, instead requiring people to bring their own.

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