Its highly irritating how networks are unwilling to offer the same deals for upgrades as for new customers. The last time I wanted to upgrade my phone, but stay with t-mobile, and of course they wouldn't match the new-customer offer.
So I got my PAC code, moved it to a virgin PAYG sim, then phoned virgin and got another PAC code and moved it back to t-mob as a new contract. Took about a weeks worth of messing around, but I got to keep my number, and get the new customer offer. That strategy works for any network by the way...
This time I'll probably just move to Vodafone on the £35/month tariff which includes 700 mins, 250 texts, free landline calls and "unlimited" (=500Mb/m) Internet. The phone costs £150 on this tarrif, but you can get £90 back from quidco.
02 do a similar (slightly better) tariff at a much cheaper phone-cost, ie for £35/month you can have, 600mins, 1000texts and a free bolt-on (which I'd choose the "unlimited" Web), but unfortunately you cant choose the bolt on via the mobiles.co.uk site (as per the modaco affiliate link)- you have to take unlimited texts, and as they are currently the only place selling it via 02 I'm thinking I'll have to go for voda, as I need my web!