UK mobile operator O2 has unveiled a new smartphone plan aimed at helping its customers upgrade to the very latest phones without incurring an expensive penalty. Named O2 Refresh, the carrier's new 24-month plan splits the cost of the smartphone and calls, texts, and data, allowing customers to upgrade their handset at any time, paying only for the cost of the outstanding airtime contract.

A Refresh plan splits handset and airtime costs, allowing customers to upgrade their handset at any time

O2's new plan draws parallels to T-Mobile USA's recent banishment of lengthy contracts, concentrating on providing the customer with control over what they pay and choice of smartphone that they wish to own. From April 16th, O2 will ask customers wanting to sign up to a Refresh tariff to choose a Phone Plan and then an Airtime Plan. When a customer wishes to upgrade their phone before the end of their 24-month contract term, they only need to pay off the remainder of their Phone Plan, ending their Airtime Plan at the same time without needing to pay a termination fee.

By decoupling the cost of the handset and call plans, O2 customers will pay less once they have paid off their Phone Plan, as they will only have their monthly Airtime Plan left to pay. The carrier will offer three Refresh Airtime plans — starting at £12 per month, ranging up to £22 for unlimited minutes, texts and 2GB of data. At launch, O2 will offer the HTC One, Sony Xperia Z, Blackberry Z10, Samsung Galaxy S3 & Note2, and iPhone 5, adding the Samsung Galaxy S4 later down the line.