O2 Refresh: upgrade your mobile phone early for less

New Refresh plan from O2 offers the freedom to upgrade to the latest mobile phone mid-contract, without paying over the odds.

O2 has unveiled a new mobile phone plan that will allow users to upgrade to the latest handsets without paying the full cost of their contract or a termination fee.

It is called O2 Refresh and is apparently the first UK 24-month deal to separate the cost of a handset from the cost of an airtime plan consisting of minutes, texts and data. You pay these two costs seperately.

With O2 Refresh you can change phone at any time without having to pay to exit the airtime contract. Instead you just have to pay for the remaining balance of the handset - which you could raise by recycling your phone for cash.

O2 says Refresh won’t cost more than a normal 24-month plan and your monthly payments will fall as soon as you finish paying off the handset – leaving you to just pay for the airtime like on a SIM-only contract.

The phones and plans

There will be three O2 Refresh airtime plans to choose from costing between £12 and £22 which you can pair with a phone plan of your choice.

You can pick from a range of the latest smartphones including the Samsung Galaxy S3, Blackberry Z10, Sony Xperia Z, HTC One and Apple iPhone 5.

Needless to say that these are pretty pricey models, but you have the choice of paying in instalments or upfront.

An example

Let’s use an example to see how it all works.

You want to get the HTC One and go for the O2 Refresh plan.

You could pick an airtime plan with unlimited minutes, unlimited texts and 1GB data costing £17 a month. You could then pay for the handset with a phone plan that costs £20 a month and a £49.99 upfront payment.

In total you will pay £37 a month for 24 months for the airtime and phone. In total the phone will cost £529.99 (including the upfront £49.99) and the airtime £408.

So if 18-months down the line you wanted to get the latest model – you would have only paid £409.99 for the phone so you need to pay a further £120 to get out. But you save £102 on the airtime part of the deal and don’t have to pay a termination fee.

Alternatively, if you're happy with the phone after 24 months your payments will drop to £17 a month as you would have paid for the phone in full.

Good timing

This sort of contract is great for gadget lovers frustrated by lengthy contracts and has been well timed for the roll out of 4G on O2 this summer.

The flexibility of the plan will mean anyone tempted by the latest gadget or superfast broadband can easily switch for less.

But it also gives mobile phone users more freedom to move on if they are not happy- with just the cost of the handset to cover.

O2 Refresh will be available in stores from Tuesday 16th of April.

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