O2 has launched a smartphone leasing service that allows Brits to get access to an Apple iPhone without an upfront cost.

For £55 per month consumers can get their hands on anApple iPhones 4S 16GB, 750 minutes of calls, unlimited texts, 500MB of mobile data and insurance (although its subject to a £60 excess for the first claim and £120 thereafter). Meanwhile, £65 per month ensures a 32GB Apple iPhones 4S can be leased.

After 12 months, they can return the handset and then lease another one or move to a different contract. O2 said if the phone is not returned, or is damaged or not in working condition when returned, customers will be subject to a charge. Furthermore, the mobile network recommends Brits protect the handset with a carry case.

O2 said the package "puts the latest smartphone technology into the hands of the people who want it" but with as few barriers such as upfront costs and two-year contracts, as possible.

"This is the first time a UK mobile operator has adopted a leasing model. We know that customers and small businesses are used to leasing everyday items from cars and washing machines to photocopiers and office space," said Sally Cowdry, marketing and consumer director for O2 UK.

"They understand how it works and what the advantages of a leasing are. We have simply taken this idea and applied it to the smartphone market."