Mobile network operator O2 has launched a leasing scheme designed to target consumers and small businesses that want to use the latest Apple iPhone but without commiting to a long-term contract.
The company announced the 'O2 Lease' scheme, which is available to business and consumers, on Saturday.
"O2 believes that the leasing model will work for those small businesses who want the latest smartphone and the latest technology, but either can’t afford the relatively high upfront cost of a normal contract or don’t want to be tied to a long contract," the company said in a statement.
Business can sign up for the service from £45 per month for a 16GB iPhone 4S. The deal includes a 12-month commitment, 300 minutes of talktime, unlimited text messages and 500MB of data usage each month. The data allowance can be increased to 1GB per month for an extra £3.33, O2 said.
The 32GB and 64GB variants of the iPhone 4S are also available to lease for no up-front charge, but will cost £50 and £55 per month, respectively. Increasing the number of talktime minutes also increases the cost of the lease up to a maximum of £85 per month for the 64GB handset with unlimited minutes.
The packages also include insurance for the phone, unlimited O2 to O2 minutes and unlimited calls to 10 UK landline numbers.
The consumer offering has similar terms to the business packages but works out a little more expensive, with the 16GB iPhone 4S costing £55 per month. However, the consumer package comes with 750 talk minutes, unlimited texts and the same 500MB of data usage. Like the business package, this can be extended to 1GB for an extra £4 per month.
The 32GB iPhone 4S costs £65 per month but the 64GB version is not available on the lease scheme.
In comparison, one of the only UK operators to offer the iPhone 4S on a 12-month contract is Tesco, which charges £35 per month for 750 minutes, 5000 texts and 1GB of data usage. Taking the 16GB model on this contract also attracts a one-off charge of £235.
Unlike the contract-subsided handset business model that prevails in Europe, customers on the leasing scheme never own the phones, meaning that after one year they can continue with a new lease, switch to a different contract or leave O2 altogether.
If a customer fails to return a handset or it is not returned in "satisfactory condition" at the end of agreement, they will incur "substantial charges", O2 said.
Photo credit: Jason Jenkins/CNET UK