Tying yourself down with a two year smartphone contract isn’t ideal when phone manufacturers are clearly sticking to a yearly – or even faster – release cycle, but buying an unlocked phone requires a substantial upfront payment too. O2 is attempting to throw another option into the mix with the launch of Refresh, a scheme that allows customers to upgrade their smartphone whenever they want.
O2 is tackling the approach by separating the monthly cost of the phone from the tariff, adding some transparency to the process so you know exactly what you’re getting. Let’s say you want to buy an HTC One on O2 refresh, for example. First, you’d pick which tariff you want: 600 minutes, unlimited texts, and 750MB of data for £12 a month; unlimited minutes, texts, and 1GB of data for £17, or 2GB for £22.
Then, you add the handset cost to the monthly price. So, the HTC One would be £20 a month after paying £49.99 upfront, bringing the total monthly contract price to £37 a month. After the handset has been paid off, the phone repayment plan would be removed, simply leaving the tariff price. And if the next big thing comes along and someone wants to upgrade, or they want to pay off the phone portion of the plan early? They pay for the outstanding cost of the handset without any penalty fees. Anyone looking to upgrade their phone no longer has to wait until the end of a 24 month contract or pay off the entire tariff.
Indeed mobile conusmers have already been offered a similar proposal which puts the ability to upgrade sooner front and centre with Phones 4U’s JUMP scheme coming into being last year. With the arrival of O2 Refresh, Phones 4U’s Director of Business Development – Alistair Firth had this to say:
“It’s great to see the rest of the industry catching up and recognising the need to offer more flexible contracts to mobile consumers, as we did with the launch of JUMP last year. We listened and responded to our customers desire for more flexibility in their contract and they continue to say that this is important to them.” He also went on to highlight the usage habits of customers with access to these new services and how the rate of upgrading dramatically increases.
“Sales of our JUMP contracts prove that there is continued demand for contracts that help customers to have access to the latest smartphones more often, particularly with early adopters. On average 28% of our JUMP customers are upgrading their handsets within 12 months, with the number of new customers ‘JUMPing’ to the latest phone peaking at 8 months into a JUMP contract. We’re seeing the highest demand for upgrades to the iPhone 5, Samsung Galaxy Note and Samsung Galaxy S3 so far.”
Buying an unlocked device and shopping for the best SIM free deal may still work out cheaper in the long run, but O2 Refresh is at least trying to bridge the middle ground between a rigid contract and open ended tariff. Better yet, O2 Refresh covers a healthy selection of handsets. Starting from Tuesday, April 16th, O2 will offer Refresh for the HTC One, Sony Xperia Z, BlackBerry Z10, Samsung Galaxy S III, Apple iPhone 5, and many others. The company also notes that devices like the Samsung Galaxy S4 and other high-end smartphones will be added in the future.