Or have I just got it all wrong??

For me they used to be the most competitive and value for money network.
But last time I upgraded I had to go through some random third party website, as o2 were refusing to give me the phone at the same price even though its on the same network

And now I am looking at new deals one in particular the HTC one M8 on Vodafone for £25 a month with 1gb data 1000 minutes . yet the very same phone with a similar plan would cost in excess of £37 on o2
This is the general pattern with everything I have compared it with. What's it all about ?!

If I was being cynical, I'd say Telefonica are trying to ring whatever they can out of O2 before they sell it on to Hutchinson.

I thought they were expensive when I was looking for my s5 mini on January. Cheapest was going to car phone warehouse who could do it on O2 cheaper than directly with O2. Exact same tariff.

I ended up phoning o2 retentions and going through this with them and asked if I got any loyalty discount. They gave me 3 pounds off per month which brought it in line with cpw so went for it. I'm 10/ month for phone and 10/month for airtime (was 13)

Vodafone and O2 are ridiculously priced if you want a contract with the phone included. Vodafone's sim only deals are very good value for money - especially the 20GB deal for £30 p/m.

I think they have been for a couple of years now.
When they were the launch partner for the iPhone, and for a few years after hey seemed quite innovative, with generous data allowances and competitive calling plans, but about 18 months ago they restructured their price plans, reduced call and data allowances, and significantly increased the cost of upgrading.
On top of all that they then introduced 4G tariffs with tiny data allowances.
For me the straw that broke the camels back was the greedy decision to add inflation to the cost of contracts mid term, so I moved my custom to 3, and for the same price as O2s 5GB package I now get unlimited data, and was also pleasantly surprised on a recent trip to the USA that for no extra charge I was allowed to use my UK call and text allowances and had 25GB of data roaming to play with as well.

Personally, I don't think they are. I was previously in a 24 month contract with EE (Never Again) I had un ltd calls and texts and 500mb of data which cost me £38 a month. Tomorrow I pick up my new galaxy s6 from 02. I get un-ldt calls,texts and 1gb data. I also got a free charging mat and there giving me £50 for my old s3. All I have to pay per month is £32.50. so for me personally, its a great deal..

What phone was with the EE contract?

O2, EE and Vodafone are all quite expensive when compared to competitors