O2 pioneers smartphone leasing in UK
As carriers look for more flexible pricing options, O2 adapts enterprise model and goes after small businesses
Published: 12 December, 2011
READ MORE: UK | Billing | Handset
Carriers are belatedly recognizing that their old pricing structures are inadequate in the multi-device age. The control that contract lock-ins bring is breaking down as consumers sacrifice the subsidy and move to the flexibility of prepaid, even in high value demographics. This is even clearer in non-handset devices, where users are reluctant to take out multiple data plans. So cellcos are looking for new ways to lure customers, with Verizon promising multi-device 'data bucket' plans next year, and O2 UK pioneering a leasing scheme for consumers.
This allows users to get a smartphone for no upfront cost but also with no voice/data contract. Instead, they pay a monthly fee to lease the device for a year. O2 Lease takes an idea common in the corporate world and offers it through consumer retail channels although small businesses may actually be the main target - to consumers there may be little perceived difference between the £55-per-month lease deal, which includes insurance, 750 minutes, unlimited text and 500Mb of data, and a one-year carrier contract.
Sally Cowdry, marketing director for the Telefonica subsidiary, commented: "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 are. We have simply taken this idea and applied it to the smartphone market."
Since the user does not own the handset, they can return it at the end of the one-year contract and take a new one if they choose.
More UK News
More BILLING News
More FEMTOCELL News
COMMENTS
Carrier Broadband Performance: Africa & Middle East
Carriers are using mobile broadband as their weapon of choice in the fight against the commoditization of voice and falling ARPU. This...
Voice over LTE: Market Analysis and Forecasts
VoLTE offer unique advantages in lowering a carrier's voice infrastructure economics and promises to improve voice quality, device...
Satellite Phones: Will Dual Mode Help the Phoenix Rise from the Ashes?
Satellite phones have followed an arduous path since their much-hyped launch more than a decade ago. The hype was followed by an e...
