Consulting firm TMNG Global has launched a smartphone leasing scheme in the US as an alternative to a two-year phone contract.

This will allow people to use the latest handset technology without having to pay early termination charges.

This will definitely appeal to mobile fanatics, for whom the 'latest model' is a must-have.

O2 currently offers something similar in the UK, allowing customers to lease an iPhone 4S for 12 months at £55 per month, including a call and data package. 

Under TMNG’s 'Mobile Device Lease xChange' a carrier would be able to offer its top customers the ability to lease a phone on a 12 month deal for roughly $20-$30 a month.

Call and data plans would be paid for separately and the phone would have to be insured by the customer or covered by a deposit.

The lease plan would benefit US service providers who currently subsidise smartphone contracts by up to $400 to then provide consumers with a discounted price tag.

As much as 50% of the price of a smartphone could be recouped if the phone company can resell it once the 12 month lease expires.

Handset makers also stand to benefit from boosting sales figures for their latest devices.

While TMNG admits that no service providers have yet signed up for the deal, it says that it is in talks with several companies.

Overall the lease plan is an attractive model for service providers and handset manufacturers, but creates an interesting dilemma for consumers.

When O2 launched its leasing deal in December said that it would appeal to those who can’t afford to pay upfront, and consumers would be financially better off if they get the cheapest deal overall then sell their phone at the end.

In fact the opposite could be true - it might be consumers with disposable income who opt for the lease plan as they don’t mind paying more for their phone if it allows them to upgrade to the newest model each year.

As collaborative consumption, in which goods are shared, becomes more popular - this model could prove to be very successful.

David Moth

Published 1 February, 2012 by David Moth

David Moth is Editor and Head of Social at Econsultancy. You can follow him on Twitter or connect via LinkedIn

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