Phew. That took long enough. After 10 minutes of pointing out to the guy at O2 that I would have to move to a new network because they would charge me money for a phone I could get free on a new contract with better minutes/texts for the same price, he agreed to drop my rate by £10 an month thus saving me £120, so that buying the new handset at £80 wasn't a loss of money.

Hurrah.

Of course, if I was a contract ninja like some, I'd have got the handset for free, dropped my contract to a £5 a month and got the first 6 months free...