The iPhone 3.0 software was released today, and one thing seemingly missing was tethering – at least for free. The following is a brief tutorial to enable Tethering without adding the monthly plan. Happy days indeed. Note that this only works on a Mac (sorry Windows users).

Obligatory disclaimer: This is most probably against your service agreement. Don’t blame me if you get told off by O2!

So, on with the show:

1. Update iTunes to version 8.2 if you don’t have it already.
2. Open Terminal.app and enter the following:

    defaults write com.apple.iTunes carrier-testing -bool TRUE

3. Download the file ‘o2_uk.ipcc’ from here.
4. Plug your iPhone in and allow it to sync.
5. Once the sync is complete, hold down the option (alt) key and click ‘Restore’ in iTunes. A dialogue box will pop up – browse to the o2_uk.ipcc file which was downloaded in step 3.
6. iTunes will now update your carrier settings.
7. Now with the iPhone still connected to your Mac by USB browse to Settings, General, Network, Internet Tethering and switch it on.
8. That’s it! You will need to wait a minute whilst the connection is established, and a dialogue will appear on your Mac telling you that a new network interface has been detected. Click ‘Network Preferences’ and wait until the new connection shows that it is online.

Now when you want to initiate a tethering session, you just need to  plug your iPhone in via USB, and turn tethering on in Settings, General, Network, Internet Tethering.

Note that if you are not on O2-UK, you will need a different .ipsw file. There is an AT&T file available here, and I understand that a number of other carriers are supported if you Google for the correct .ipsw file, but I have not tried them out, so I’d recommend a bit of research before going ahead with it.