O2 Announces Phone Rental Scheme

Embarrassed by your 2-year-old phone? O2's got the answer for you.

UK mobile carrier O2 has announced the launch of a mobile phone rental scheme that will see customers lease phones from the carrier on a yearly basis. Dubbed O2 Lease, the new scheme is apparently the first smartphone leasing service in the UK and aims to offer customers the latest smartphones without lengthy contracts.

Sally Cowdry, marketing and consumer director for O2 UK, said: "This is the first time a UK mobile operator has adopted a leasing model. We know that customers and small businesses are used to leasing everyday items from cars and washing machines to photocopiers and office space. They understand how it works and what the advantages of a leasing are. We have simply taken this idea and applied it to the smartphone market."

O2 Lease will be available initially through O2 retail stores as well as over the phone and will enable customers to lease a new smartphone for one year for £55 per month. Your £55/month payment covers insurance, 750 voice minutes, unlimited text and 500 MB of data. Small businesses will also have a range of O2 Lease business tariffs to choose from. Once your year is up, if you plan on upgrading or leaving O2, the network will send you a bag and give you notice that it's time to return the handset. 

However, the clumsy among us (ahem) should note that there are charges for returning the phone to O2 in an unsatisfactory state.

"Customers will need to take good care of the device to avoid unnecessary charges at the end of the lease, so O2 recommends customers protect the device with a carry case," O2 said today. "If a customer loses or damages it badly, they will need to claim on O2 insurance and replace it before the plan ends. If the phone remains unreturned, is damaged or it’s not working when received, O2 will raise a charge. The relevant charges are given to the customer before they decide to take O2 Lease so there should be no surprises."

O2 is apparently kicking O2 Lease off with iPhone 4S rentals. Keep in mind that if you want the 32GB model, it's going to cost you £65 per month as opposed to £55.