O2 smartphone contract splits handset costs from tariffs for easier upgrades

O2 has launched a new 24 month tariff that decouples the cost of the handset from the cost of the services, meaning customers can upgrade their handsets whenever they want, or alternatively, cut the cost of the contract by not upgrading the device at the end of the term.
Written by Ben Woods, Contributor on

O2 has launched a new mobile smartphone contract that splits the cost of the tariff from the cost of the handset, meaning that customers can upgrade their device whenever they want.

The new tariff, called Refresh will be available for customers to sign up to from 16 April and offers customers the option of paying for their handset separately to the airtime left on the contract.

"When a customer signs up to O2 Refresh, they choose a Phone Plan and an Airtime Plan. By signing up to and paying separately for their phone and airtime, customers are given complete transparency, while paying the same overall as they would on a standard 24 month Pay Monthly tariff," the company said in a statement.

The Refresh plan is being offered on at three different levels to appeal to a wider range of customers. For £12 per month customers get 600 minutes, unlimited texts and 750MB of data. Bumping that up to 17 per month removes limits on call time or texts and increases the data allowance to 1GB. For £22 per month, that data allowance can be increased to 2GB.

The Phone costs can vary, but for example, if a customer decided to opt for the HTC One and pay £49.99 up-front for the handset, they would then pay £20 per month for the remainder of the contract. In addition to this, they would also be paying the service agreement charge, so, £12, £17 or £22 for the duration of the contract.

By decoupling texts, data and mobile minutes from the cost of the handset, customers have the option of upgrading a handset early by paying off what is left of the Phone payments. It also allows customers that don't want to upgrade their handset at the end of the 24 month contract to simply continue paying for their service tariff.

At launch only certain devices will be available on the Refresh tariff, including: the Samsung Galaxy S3, S3 Mini, Note 2 and Ativ S, Blackberry Bold 9900 and Z10, HTC 8X, HTC One, Sony Xperia T and Z, iPhone 4, 4S and 5, Nokia 820 and LG Nexus 4. O2 said that the upcoming Samsung Galaxy S4 and BlackBerry Q10 would also be available on the deal.

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