O2 Refresh decouples the cost of the phone and the tariff

O2 claims it is transforming the way consumers can purchase the latest mobile phones with the launch of O2 Refresh…

Given that new mobile devices launch every five minutes these days, many consumers can find it frustrating to stay committed to one handset when they’re locked into a two-year contract.

Claiming a UK first, tech-loving O2 customers will now have the freedom to get their hands on the latest devices as soon as they hit the shelves thanks to the innovative way they will pay for their handset and airtime separately.

O2 Refresh logo

That’s because O2 Refresh offers customers the opportunity to get a new phone when they want, without having to pay out their airtime contract.

So if you’re on this 24-month tariff and you want a new phone, you can simply pay the remaining balance to buy out your old phone and then start afresh with a new phone (and a new 24-month contract).

“Refreshing your handset will also refresh your airtime contract, so those who constantly phone-hop and get new devices could end up missing out on competitive tariffs in the rest of the market,” warned Ernest Doku, telecoms expert at price comparison and switching service uSwitch.com.

However, Doku said O2 Refresh would highlight just how much consumers can waste by staying on the same plan once their contracts have ended and may be a wake-up call to mobile customers.

“O2 Refresh is a big step forward in increasing transparency by showing customers exactly what they’re paying for. But the really consumer-friendly part is that customers’ bills will automatically reduce at the end of their contracts, once their handsets have been paid for. Today’s pricey smartphones need to be paid for somehow, and many consumers will do so through their monthly bills. However, this subsidy is designed to cover the cost of the phone by the time your contract ends, which means sticking on the same bill will leave you shelling out for a device that you’ve already finished paying for,” he explained.

So how does it work?

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.

For those customers who want a new handset before the end of their contract term, O2 Refresh enables them to pay off the remainder of their Phone Plan and end their Airtime Plan with no termination fee. To make it even more affordable to get the latest smartphone, customers can trade in their old mobile for cash using O2 Recycle, getting up to £260 to put towards their new phone.

“For the first time in the UK, O2 Refresh will make it possible to get a new phone part way through a pay monthly contract, at any time – quickly, easily and cost-effectively,” said Feilim Mackle, sales and service director at Telefónica UK.

Mackle said O2 Refresh also offers great long-term value for those customers who don’t want or need a new phone before the end of their contract term. Once the customer has paid the full balance of their Phone Plan, monthly payments dramatically reduce to just the cost of the Airtime Plan.

“Mobile phone technology continues to advance at a rapid pace, yet the way phones are sold has remained largely static,” said Mackle. “Increasingly our customers are telling us that they don’t want to be tied to the same phone for two years and, with 4G coming to O2 this summer, we want to make it easier for our customers to benefit from the latest technology.”

O2 Refresh offers a choice of three Airtime Plans:

• For £12 a month, customers get 600 minutes, unlimited texts and 750MB of data

• For £17, customers will have unlimited minutes, unlimited texts and 1GB of data

• For £22 they receive unlimited minutes, unlimited texts and 2GB of data.

O2 Refresh has also been designed to give customers the flexibility to choose whether to make an upfront payment. The overall cost of the phone may be less depending on whether a customer chooses to make an upfront payment toward their mobile and which O2 Refresh Airtime Plan they opt for.

At launch, O2 Refresh will be available on a range of phones including the HTC One, Sony Xperia Z, Blackberry Z10, Samsung Galaxy S3 and Apple iPhone 5. Following the launch, O2 Refresh will be extended to include a wider range of phones, with a specific focus on high-end smartphones including the Samsung Galaxy S4.

O2 Refresh launches tomorrow – 16 April 2013 – and will be available in O2 stores nationwide in the UK and online and over the phone in the coming months.