O2 have become the first company to offer you the chance to lease the iPhone 4S.

With the leasing agreement you pay a fixed fee per month over a period of 12 months, before handing the iPhone 4S back to O2.

The major advantage of such a deal is that you don't have to pay an up-front fee for the iPhone 4S on a 12 month contract. However, you never actually own the smartphone and will have to pay a higher monthly fee.

For a 16GB iPhone 4S on a 12 month lease you'll have to pay £55 a month , which gets you 750 minutes, unlimited texts, 500MB of mobile data and unlimited WiFi. Those wanting the 32GB iPhone 4S will have to pay £65 a month.

Initially, these figures might seem very high . but you do get free insurance thrown in which is worth around £12 a month and you shouldn't forget that its just a 12 month deal. You can then get a new mobile after one year when you take out a new lease !

Anyone who has taken out a lease before knows the major downside is that you have to return the goods at the end of the contract. If you damage the mobile you'll have to pay for any repairs needed.

The insurance helps if your mobile gets stolen or lost, but won't cover damage and it also has an excess of £60 for the first claim and £120 on any future claims.

Personally, the guys at 3G wouldn't trust themselves to look after the iPhone 4S well enough to take out the lease, but for careful people this looks like a viable alternative.

When you also consider the iPhone 5 is expected to launch sometime next year, you might be smart not to get locked into a 2 year contract.