O2 Lease: smartphone rental scheme announced

We're forever trying to think of ways to give our mobile phone networks more of our hard-earned cash so we're pretty excited about O2 Lease, a new scheme from O2 which allows you to rent a handset for a year for the princely sum of £55 a month.

For more than the cost of a contract that allows you to keep the phone at the end of it, you could borrow a handset from the network which you then have to give back at the end of the year.

As well as temporary ownership of a smartphone, anyone signing up to O2 Lease will enjoy 750 minutes, unlimited texts, 500MB of data and insurance for their £55 a month.

Please, take my money

If you take into account the fact that O2's smartphone insurance usually costs £15 per month, we suppose it's not too outlandish – but you can get smartphone cover from other outlets for about £5.99.

We know it's only Monday, but let's look at the maths: £55 a month for a year equates to £660. O2 also offers, say, the Samsung Galaxy S2 for free on a £47 a month 18-month contract – that comes to £846 over the course of 18 months.

So you get the same phone to keep, same data, more minutes (900) and the same texts over the course of eighteen months for just £220 more than 12 months of the leasing scheme, at the end of which you don't get to keep the phone.

Considering the Samsung Galaxy S2 is worth £449.99 from O2 SIM-free, even if you add on £6 of insurance a month to the contract cost, it doesn't seem like particularly good value to us.

The upside is that there's no upfront payment when you stroll into an O2 store to take out the lease - and we're interested to see if consumers really do care about owning their smartphone, when most simply keep their old ones at the end of a contract as a spare should their fancy new one die or get lost.

Sally Cowdry, marketing and consumer director for O2, reckons it's a pretty snazzy deal though. She 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.

"We have simply taken this idea and applied it to the smartphone market."