O2 Offers 12 Month Smartphone Lease

O2 LogoIn a change to the mobile phone contract status quo, UK mobile telco O2 has announced a 12 month smartphone leasing service. For £55 per month, you get a 16 GB smartphone, 750 minutes, unlimited text, a paltry 500 MB of data and insurance. Allegedly unique in the UK market, both consumers and business will be able to take advantage of O2 Lease.

If you are wondering what the difference is between a 12 month lease and 12 month contract, it’s simply that the smartphone doesn’t belong to you and must be returned in reasonable condition at the end of the lease. That’s why insurance is included in the cost of the lease so that the smartphone can be replaced in the event of damage or loss.

O2 extols the benefits of a 12 month lease, tying it into the upgrade cycles of the smartphone models and giving you the latest model without a long contract. The choice of smartphone models isn’t mentioned but O2 offers all the premium smartphones – Apple iPhone 4S, Samsung Galaxy Nexus, Nokia Lumia 800 and Blackberry Torch. 32GB models cost an extra £10 per month. Update – O2 Lease is specifically mentioned against the iPhone 4S here.

If you really want the latest phone and you’re a big talker or texter, this scheme might be worth considering but the tiny data allowance really makes it all a bit of a farce. My monthly data usage is between 600-800 MB and I don’t think that I’m a particularly heavy user. Yes, I might download the odd podcast but it’s mostly email, web browsing, Twitter and RSS feeds.

Personally, I tend to buy my smartphones SIM-free as there are far better tariffs out there and you can easily sell the smartphone after 12 months to part-fund your next purchase. Do the maths for yourself and see what works for you.

The full press release is here.