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Phones

O2 Refresh splits phone and network tariffs for fast upgrades

A new phone plan from O2 sees you paying two contracts -- one for the phone, and one for your minutes, texts and data.

Oxygenated operator O2 has a new offering that splits your contract into two tariffs, making it possible to get a mid-plan upgrade for a little less cash than usual.

The network's wizard wheeze, which is dubbed O2 Refresh, sees you picking a set monthly fee for your minutes, texts and data, and then adding a separate monthly amount to pay for the phone itself.

The benefit of this setup is that if you want a new phone, you can pay off the remaining months' balance on the smart phone part of the contract, without ditching the data, texts and other fundamentals.

Because they don't include the price of the phone, the basic 'airtime' tariffs are lower. The plan could save you cash if you plan on keeping your phone for more than two years, as once the phone is paid off you'll only have to pay your monthly minutes, texts and data fee.

The Refresh plan -- which will be available in O2 shops from 16 April -- ties you in for a whopping 24 months, so you will be allied to O2 for a whole two years. O2 tells me that once the phone part of the contract is paid off you're totally free, however, if you did want to opt out early.

Detailed price plans aren't known yet, but as an example O2 says you could get the HTC One by paying £17 per month for unlimited minutes, texts and 1GB of data, then £20 per month for the phone itself, plus £50 up front.

A peek at O2's regular rates for that phone shows that you'd get the same amount of minutes, texts and data for the same monthly and upfront cost. In other words, O2 Refresh doesn't seem to be any more expensive than the operator's normal contracts, though you'd be wise to do a full comparison at the time before tying yourself into a lengthy contract.

O2 boasts it's the first in the UK to offer a plan of this nature. Only a select few high-end mobiles are available at the moment, including the Samsung Galaxy S3, iPhone 5 and HTC One.

The BlackBerry Z10, Samsung Galaxy Note 2 and Sony Xperia Z are also featured, while O2 promises that the much-anticipated Samsung Galaxy S4 will be part of the plan in future.

Would you opt for the Refresh tariff? Is this the way contracts should be? Or is it just another way to tie you to a network for two years? Let me know in the comments, or on our Facebook wall.

Update 15 April: Added that once you pay off the phone, you're no longer tied into a contract.