Tuesday, December 13, 2011

o2's iPhone 4S lease rip-off

Can't afford an iPhone 4S? Well o2 has you covered with a new lease an iPhone 4S scheme. Or so they hope you think they do. The UK carrier now offer the 16GB iPhone 4S on a 12-month lease for £55 per month - that is £660 a year. And after a year? Well you return the iPhone and have nothing to show for.

Considering you can *own* a brand new sim-free Apple iPhone 4S 16GB for £500, it sounds like o2 is taking bollocks to a dizzying new height.

For the purpose of this comparison, I estimate that you can sell a used in good condition (the condition o2 wants the phone back after the lease is over) 4S 16GB for £300, conservatively. After all used iPhone 16GB regularly sells for around £400 today, only £100 less than they were a year ago!

Okay, so the lease also includes 750 minutes per month (an offer, the normal tariff is 600 minutes per month), unlimited texts and 500MB of data. Even then it doesn't sound like it is of any value. And here's why.

First let's look at some of o2's competitors, starting with the fabulous Three UK network. With their £15 a month PAYG ACYE booster, you get less minutes (300), and less texts (3000 - which is more than enough for many) and *unlimited data*. That's about £180 a year. Add the price of a new unlocked 4S, the total cost would be £680 - just £20 more - and you get to keep the phone! So in effect you are saving £280 by buying a sim-free iPhone 4S and Three UK PAYG sim plan separately compared to leasing it via O2. How about that O2? Your leasing option doesn't sound like a bargain now, does it?

This, my good people, is the cheapest way of owning an unlocked iPhone 4S with a tariff that allows you to phone people. You could even go cheaper if you select Three's SIM Only PAY+12 (12GB of data valid for a year) for a bargain £70.49, assuming you are willing to forgo the backward technologies that are GSM voice and SMS texts. Services like WhatsApp, Skype, Tango, iMessage and FaceTime will have you covered. But this isn't a fair comparison so I will let it slide.

Moving on to Vodafone. Well the network offers a sim-only 12 month rolling contract, and for £26 a month, you get 900 minutes, 3000 texts and 500MB data a month. Total damage: £312 + £500 = £812. Deducting the cost of the phone should you sell it (£300), that's like £148 in savings in comparison to o2's lease tariff. You could get an iPhone 4S 32GB version and still save money to spend on bucket loads of apps, and then some.

Now we look at o2 themselves. Being fair, I will select one of their stupidly priced sim-only plan, this time from their 12- month Simplicity tariff. For £27 a month, you get 900 minutes, 500MB data and unlimited texts. That totals to a mind-boggling £324, slightly higher than what you will pay on Vodafone, Three UK and even GiffGaff, a network o2 owns. Add the cost of a new 4S you have to pay £824. Ah, but don't forget you actually own the phone itself and even if you sell the 4S for £200 less the price you paid, you are saving £136. £136 less than what o2 charges for this retarded leasing service, and you get more minutes!

Last but not least, let's have a good look at GiffGaff, a virtual network owned by o2 themselves. For £20 a month, you get 800 minutes (more than o2's lease), truly unlimited texts and truly *unlimited data* (also more than o2), as well as unlimited calls, texts and video calls to other GiffGaff customers. Wow. You would be a mug to have gone for o2's own Simplicity tariff after reading that. Sell your iPhone after year and you are looking at a saving of £220 - on a tariff that is actually better than o2's offering.

Ah, but I hear you say that the o2 lease also includes insurance. I am sorry but dedicated mobile phone insurance are for fools. Your home content insurance will cover this for less! And don't forget the insurance insures the iPhone for theft/loss, on o2's behalf. Damage the phone and o2 will still bill you for it! The costs are detailed below on this site.

It is worth noting that o2's lease does include unlimited WiFi use. The competiting tariffs here does not include any sort of WiFi use, bar Vodafone (750MB limit on BT OpenZone). But remember that the Three UK's ACYE add-on and GiffGaff offers truly *unlimited data*. Who needs WiFi? In any case, remember that most cafes and restaurants are now opening up their WiFi networks for free.

Remember the best thing about owning your own sim-free phone is you can sell it if you want. Especially when you realised half way through your contract that the 4S doesn't rock your boat and you wished you went for something else instead. As for o2, researching for this blog post only proved I made the right decision when I decided to leave this miserable network three years ago.


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Abs@O2 said...

Hi there,

We had a look at your review on O2 Lease. The key to O2 Lease is that you do not have to pay upfront costs of purchasing the device, so you very rightly compare costs and tariffs after purchase. It is an option for people who want to change their handset on an annual basis, but do not want to pay the upfront costs of doing so.

Also just to clarify, the insurance is there if a person damages their phone during the course of the lease and they can claim on the insurance included in the tariff, and we will replace it. We only levy a charge if the phone is returned damaged at the end of the lease. O2 Lease is not for everyone, buy it is an option for people to consider and take advantage of if they wish.

Happy Christmas from O2 :)


O2 Social Media team

Sell Used Cell Phones said...

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