Rating: Abandon your handset before it becomes retro
It seems that Telefónica/O2 in the UK has finally woken up to the dangers of 24 month contracts which it needs to offer in order to remain competitive with its rivals. 24 months might make sense to accountants but it makes little sense to consumers. In terms of technology, an Internet year equates to three months. So by the time today’s contract subscribers have reached the end of their contract, their smartphones is seven years out of date. To counteract this, O2 has launched a new tariff aimed at enabling customers to get the latest phone whenever they want. It’s called O2 Refresh and GoMo News suspects that rival operators will be watching closely to try to evaluate the effectiveness of this new tariff.
What O2 Refresh offers contract customers is the ability to disassociate themselves from the hardware side of a contract.
So if an O2 subscriber wants to pay off the hardware side of an O2 Refresh contract, he or she can do so.
It would even be possible to sell an existing smartphone on the likes of eBay or to O2 Recycle and put the money towards a market-leading new handset.
Bizarrely, this new offering will also suit those who swear all they need a mobile phone for is “making telephone calls.”
If they have a cheap enough handset, they can pay the cost of the hardware off and just pay for nothing but the airtime.
GoMo News reckons that O2 Refresh is a stroke of genius. The only problem lies with trying to explain the benefits to the consumer.
Imagine the sales pitch. “You know how we’ve been tying you into a two year contract?”
“Well now we can keep you as a loyal O2 customer whilst simultaneously enabling you to upgrade to the latest, snazy handset.”
Sounds great. How many subscribers will stick with O2 and not churn as a result?
Only time will tell.