10% of revenue
Mobile phone operators in the UK operate on pretty thin margins, so 10% of revenue will come to pretty much 100% of profit from the iPhone subscribers. O2 would have to be crazy to agree to that.
Plus, I'm not sure why apple is insisting on removing network subsidies. an iPhone costs $499 in america (£260 ish). Given american companies usual policy of robbing UK customers blind, that should translate to about £350 over here. An N95 costs £130 on their most popular tarriff, that's a BIG difference.
It'll sell, but I think it'll sell to a few rich kids and city bankers out to impress their clients. O2 won't make any money out of them, but there'll be so few that it will be worth the extra footfall into their shops from people interested in an iPhone. When they hear the price the salesman can then flog them an N95.