O2 has reduced its upfront price for Apple’s iPhone 5c just a week after defending the previous £600 “cash price” of the handset as good value.
Last week I highlighted how the network was charging customers buying the 16GB version of the handset outright £600, £131 more than Apple wants for the identical model.
Despite defending the original £600 price point as good value, the network has now lowered the outright purchase price to £529.99.
It has also dropped the option to pay nothing upfront and then 24 payments of £25 per month on its Refresh plan. Customers can instead pay £29.99 upfront and £20 per month for 24 months, a total of £509.99.
Although the cost of buying the handset outright from O2 is now lower, it is still more expensive than the general market price and more expensive than the network’s offered monthly options.
Asked why the network had now dropped the handset’s price, an O2 spokesperson said:
“We have reviewed our ground-breaking O2 Refresh iPhone 5c tariffs and removed the £25 per month Phone Plan. This is because our upfront cost of £29.99/£20.00 per month Phone plan offers customers better value, saving them £90 over the term of their contract.”
When asked why it was more expensive to buy the handset outright than via the Refresh plan the spokesperson added:
“O2 Refresh rewards people who pay for part of their phone up front and then spread the rest of the cost. It’s not aimed at people who want to do an outright purchase of the phone. We do offer that, however as you’ve mentioned it’s not how to get the best out of O2 Refresh.”